AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





                      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             September 30, 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 1-7981


                        American General Corporation                         
   (Exact name of registrant as specified in its articles of incorporation)


                Texas                                     74-0483432          
    (State of Incorporation)                         (I.R.S. Employer 
                                                       Identification No.) 


    2929 Allen Parkway, Houston, Texas                     77019-2155         
(Address of principal executive offices)                 (Zip Code) 


                                 (713) 522-1111                             
             (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      . 

As of October  31, 1997, there were 243,577,782 shares  (excluding shares held
in  treasury  and by  a  subsidiary) of  American General's  Common  Stock and
2,317,701  shares  of  American   General's  7%  Convertible  Preferred  Stock
outstanding.
<PAGE>
 
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





                              INDEX TO FORM 10-Q

                                                                              
                                                                     Page
Part I.    FINANCIAL INFORMATION.


         Item 1.  Financial Statements.

                  Consolidated Statement of Income for the nine
                    months and quarter ended September 30, 1997
                    and 1996 .........................................   2

                  Consolidated Balance Sheet at September 30, 1997 and
                    December 31, 1996 ................................   3

                  Consolidated Condensed Statement of Cash Flows for
                    the nine months ended September 30, 1997 
                    and 1996 .........................................   4

                  Notes to Consolidated Financial Statements .........   5

         Item 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations ..............  13


Part II.   OTHER INFORMATION.


         Item 1.  Legal Proceedings ..................................  30

         Item 5.  Other Information ..................................  31

         Item 6.  Exhibits and Reports on Form 8-K ...................  35












<PAGE>
 




                                                  -1-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





                        PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

                         AMERICAN GENERAL CORPORATION
                       Consolidated Statement of Income
                                  (Unaudited)
                       (In millions, except share data)

                                     Nine Months Ended      Quarter Ended
                                       September 30,        September 30,  
                                      1997        1996      1997      1996 
Revenues 
 Premiums and other considerations. $ 2,472     $ 2,424   $   839   $   820 
 Net investment income ............   2,983       2,812     1,010       943 
 Finance charges ..................     950       1,093       315       359 
 Realized investment gains ........      25          57        11        26 
 Equity in earnings of Western
  National Corporation ............      39          27        13        10 
 Other ............................     134         111        47        39 
     Total revenues ...............   6,603       6,524     2,235     2,197 

Benefits and expenses
 Insurance and annuity benefits ...   3,127       3,090     1,051     1,028 
 Policyholder dividends ...........      70          71        23        24 
 Operating costs and expenses .....   1,058       1,041       360       349 
 Commissions ......................     648         635        224      215 
 Change in deferred policy
  acquisition costs and cost of
  insurance purchased .............     (71)        (92)      (20)      (25)
 Provision for finance receivable
  losses ..........................     187         301        56        90 
 Merger-related costs .............     272           -         -         - 
 Losses on assets held for sale ...     113          20         -        20 
 Litigation and other charges .....      50          50         -         - 
 Interest expense
  Corporate .......................     117         121        40        40 
  Consumer Finance ................     343         369       117       122 
     Total benefits and expenses ..   5,914       5,606     1,851     1,863 

Earnings
 Income before income tax 
  expense .........................     689         918       384       334 
 Income tax expense ...............     315         331        135      125 
 Income before net dividends on
  preferred securities of
  subsidiaries ....................     374         587       249       209 
 Net dividends on preferred 
  securities of subsidiaries ......      62          29        23        10 
     Net income ................... $   312     $   558   $   226   $   199 


                                                  -2-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997


Net income per share .............. $  1.27     $  2.24   $   .91   $   .80 
Dividends paid per common share ... $  1.05     $   .98   $   .35   $   .33 
Average fully diluted shares 
  outstanding (in thousands) ...... 251,371     252,441   252,827   251,924 



















































                                                  -3-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                          Consolidated Balance Sheet 
                                  (Unaudited)
                      (In millions, except share amounts)

                                                 September 30,  December 31, 
                                                     1997           1996     
Assets 
 Investments 
  Fixed maturity securities (amortized cost:
   $45,289; $42,867) ............................    $47,557       $44,355 
  Mortgage loans on real estate .................      3,258         3,228 
  Equity securities (cost: $85; $111) ...........        110           137 
  Policy loans ..................................      2,142         2,011 
  Investment real estate ........................        245           626 
  Other long-term investments ...................        169           210 
  Short-term investments ........................        108           265 
      Total investments .........................     53,589        50,832 
 Cash ...........................................        218           176 
 Finance receivables, net .......................      7,146         7,230 
 Investment in Western National Corporation .....        540           535 
 Deferred policy acquisition costs ..............      2,877         2,954 
 Cost of insurance purchased ....................        735           755 
 Acquisition-related goodwill ...................        673           605 
 Other assets ...................................      2,554         2,517 
 Assets held for sale ...........................          -           667 
 Assets held in Separate Accounts ...............     11,084         7,863 
      Total assets ..............................    $79,416       $74,134 

Liabilities
 Insurance and annuity liabilities ..............    $47,592       $46,022 
 Debt (short-term)
  Corporate ($553; $631) ........................      2,025         2,102 
  Consumer finance ($2,677; $3,131) .............      6,856         7,630 
 Income tax liabilities .........................      1,180         1,078 
 Other liabilities ..............................      1,634         1,368 
 Liabilities related to Separate Accounts .......     11,084         7,863 
      Total liabilities .........................     70,371        66,063 

Redeemable equity
 Company-obligated mandatorily redeemable
  preferred securities of subsidiaries
  holding solely company subordinated notes
   Non-convertible ..............................      1,480           982 
   Convertible ..................................        246           245 
     Total redeemable equity ....................      1,726         1,227 

Shareholders' equity 
 Convertible preferred stock (shares issued

                                                  -4-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997


  and outstanding: 2,317,701; 2,323,722) ........         85            85 
 Common stock (shares issued: 259,135,053; 
  283,738,546; outstanding: 243,532,716; 
  241,170,903) ..................................        318           572 
 Net unrealized gains on securities .............        953           627 
 Retained earnings ..............................      6,484         6,420 
 Cost of treasury stock .........................       (521)         (860)
      Total shareholders' equity ................      7,319         6,844 
      Total liabilities and equity ..............    $79,416       $74,134 














































                                                  -5-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                Consolidated Condensed Statement of Cash Flows
                                  (Unaudited)
                                 (In millions)
                                                       Nine Months Ended
                                                         September 30,    
                                                        1997        1996  
Operating activities
       Net cash provided by operating activities ...  $ 1,167     $ 1,669 

Investing activities 
 Investment purchases ..............................   (9,323)     (7,430)
 Investment dispositions and repayments ............    8,447       6,609 
 Finance receivable originations and purchases .....   (3,481)     (3,860)
 Finance receivable principal payments received ....    3,200       3,730 
 Sale of finance receivables .......................      733           - 
 Sale of land development operations ...............      287           - 
 Net decrease (increase) in short-term 
  investments ......................................      213        (136)
 Acquisition of Home Beneficial Life ...............     (283)          - 
 Acquisition of Independent Life ...................        -        (106)
 Investment in Western National Corporation ........        -        (126)
 Other, net ........................................      (68)       (155)
       Net cash used for investing activities ......     (275)     (1,474)

Financing activities
 Retirement Services and Life Insurance
   Policyholder account deposits ...................    2,309       2,238 
   Policyholder account withdrawals ................   (2,317)     (2,113)
      Total Retirement Services and Life Insurance .       (8)        125 
 Consumer Finance
   Net (decrease) increase in short-term debt ......     (454)        211 
   Long-term debt issuances ........................      485          73 
   Long-term debt redemptions ......................     (808)       (426)
      Total Consumer Finance .......................     (777)       (142)
 Corporate
   Net (decrease) increase in short-term debt ......      (79)        310 
   Long-term debt redemptions ......................        -         (50)
   Issuance of preferred securities of subsidiaries.      498           - 
   Dividends on common and preferred stock .........     (248)       (227)
   Common stock repurchases ........................     (365)       (161)
   Other, net ......................................      129         (50)
      Total Corporate ..............................      (65)       (178)
       Net cash used for financing activities ......     (850)       (195)

Net increase in cash ...............................       42           - 
Cash at beginning of period ........................      176         227 
Cash at end of period ..............................  $   218     $   227 


                                                  -6-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997


Supplemental disclosure of cash flow information:
 Cash paid during the period for
   Income taxes ....................................  $   292     $   225 
   Interest
     Corporate .....................................      110         125 
     Consumer Finance ..............................      378         369 
   Dividends on preferred securities of
    subsidiaries ...................................       93          43 















































                                                  -7-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                  Notes to Consolidated Financial Statements
                              September 30, 1997

1.   Accounting Policies.   The accompanying unaudited consolidated  financial
     statements of American General Corporation and its subsidiaries (American
     General or the company)  have been prepared in accordance  with generally
     accepted  accounting principles for interim  periods.  In  the opinion of
     management, these  statements include all adjustments  that are necessary
     for a fair presentation of  the company's consolidated financial position
     at September 30,  1997, the  consolidated results of  operations for  the
     three  months and nine months ended September  30, 1997 and 1996, and the
     consolidated cash flows for the nine  months ended September 30, 1997 and
     1996.

     All prior  period consolidated  financial statements of  American General
     have  been  restated to  include  the  results  of operations,  financial
     position, and cash flows of USLIFE Corporation (USLIFE) under the pooling
     of  interests method of accounting in conjunction with the acquisition of
     USLIFE (See Note 2).

2.   Acquisitions.

     Home Beneficial Life.  On April  16, 1997, American General completed the
     acquisition  of Home Beneficial Corporation, the  holding company of Home
     Beneficial  Life  Insurance  Company  (Home Beneficial  Life),  for  $665
     million.   The  purchase price  consisted  of $283  million cash  and 9.5
     million shares of American General common stock.

     The  acquisition was  accounted for  using the  purchase method,  and the
     results  of  operations  and cash  flows  of  Home  Beneficial Life  were
     included  in the  company's consolidated  statements of  income and  cash
     flows  from the date of acquisition.  The acquired assets and liabilities
     were reflected  in American General's  consolidated balance  sheet as  of
     April 16,  1997.  The purchase price was allocated to specific assets and
     liabilities based on  management's best estimate of their respective fair
     values at  that  date.    Evaluation of  fair  values  assigned  to  Home
     Beneficial Life's assets and  liabilities, primarily related to insurance
     and employee benefit  liabilities, is continuing,  and allocation of  the
     purchase price may be adjusted when additional information is available.










                                                  -8-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

     Noncash investing and financing activities  related to the acquisition of
     Home Beneficial Life that are not reflected in the consolidated condensed
     statement of cash flows for the nine months ended September 30, 1997 were
     as follows:

     (In millions)

     Fair value of assets acquired                               $1,441 
     Fair values of liabilities assumed                            (776)
     Issuance of common treasury shares                            (382)
       Net cash paid for acquisition of Home Beneficial Life     $  283

     USLIFE.   On  June 17,  1997, American  General completed  the merger  of
     USLIFE in an all-stock transaction.  American General issued 39.0 million
     shares  of  common  stock (with  a  market  value  of approximately  $1.8
     billion), or 1.1069 shares in exchange for each USLIFE common share.  The
     exchange  ratio was  based on  the transaction  price  of $49  per USLIFE
     common  share divided  by an  average trading  price of  American General
     common stock for a period prior to closing.

     The acquisition was accounted  for using the pooling of  interests method
     of accounting and, accordingly, American General's consolidated financial
     statements  and  notes  have been  restated  to  include  the results  of
     operations, financial position, and  cash flows of USLIFE.   Revenues and
     net income for the individual entities were as follows:

                                      Six Months Ended
     (In millions)                     June 30, 1997  

     Revenues
      American General                     $3,471     
      USLIFE                                  897     
       Total                               $4,368     

     Net income (loss)
      American General                     $  205  (a)
      USLIFE                                 (119) (b)
       Total                               $   86     

     (a)  Includes  aftertax merger-related  costs of  $81 million,  losses on
          assets held  for sale of $73  million, and litigation charge  of $33
          million.

     (b)  Includes aftertax merger-related costs of $166 million.






                                                  -9-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

     Western National  Corporation.  On  September 12, 1997,  American General
     announced a  definitive  agreement to  acquire the  remaining 54%  equity
     ownership  of Western  National Corporation  (Western National)  that the
     company does not currently own.  The purchase price will be $1.2 billion,
     or  $29.75 per  share, in  cash or  American General  common stock.   The
     aggregate cash  consideration and the aggregate  stock consideration will
     each be limited to 50% of the total consideration.

     The exchange ratio for  American General common stock will  be determined
     by dividing $29.75 by an average trading price of American General common
     stock prior to closing, subject to a 6% collar above and below $50.00 per
     share for  American General  common stock.   Outside of the  collars, the
     value of the transaction would vary, subject to a maximum value of $31.71
     per Western National share at American General share prices of $60.00 and
     above,  and a  minimum  value of  $27.53  per Western  National share  at
     American  General  share prices  of $40.00  and  below.   The acquisition
     agreement may be terminated  if the average American General  share price
     is below $40.00 and American General elects not to increase the aggregate
     consideration  to maintain a minimum value of $27.53 per Western National
     share.

     The  transaction, which  is  subject to  approval  by Western  National's
     shareholders and  requisite regulatory authorities, is  expected to close
     in early 1998.  Upon completion of the transaction, Western National will
     be reported  as part of  American General's Retirement  Services segment,
     using the purchase method of accounting.

     Investment in Grupo Nacional  Provincial Pensiones.  On October  2, 1997,
     the company announced a definitive agreement to acquire a 40% interest in
     Grupo Nacional Provincial Pensiones  S.A. de C.V., a new  holding company
     formed by  Grupo Nacional  Provincial, S.A.  (GNP),  a Mexican  financial
     services company.  GNP will own the remaining 60% of the holding company,
     which will own a 51% interest in Profuturo GNP, a  company which provides
     enrollment, administration, and investment services for employees covered
     by the Mexican social security  system.  The holding company also  owns a
     100%  interest in Porvenir GNP,  a company which  provides single premium
     immediate  annuities to  participants  covered under  the Mexican  social
     security  system.   The  transaction, which  is  subject to  approval  by
     requisite  regulatory authorities,  is  expected to  close during  fourth
     quarter 1997.










                                                 -10-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

3.   Merger-Related Costs.  The company recorded the following costs in second
     quarter 1997 related to the merger with USLIFE:

     (In millions)                           Pretax     Aftertax

     Change in control costs                  $179        $155
     Transaction costs                          22          22
     Restructuring costs                        71          46
     Deferred tax asset valuation
      allowance                                  -          24
        Total                                 $272        $247

     Change in control costs  consist primarily of severance and  supplemental
     retirement  plan payments  to  USLIFE executives,  payable under  various
     USLIFE plans in  effect prior to  the merger.   A substantial portion  of
     these payments are considered excess parachute payments for  tax purposes
     and are not tax deductible by the company.

     Transaction  costs  include expenses  for investment  bankers, attorneys,
     accountants, and proxy printing costs.

     The restructuring costs recorded in second quarter 1997 consist primarily
     of severance  and the elimination  of redundant facilities  in connection
     with  the merger and the concurrent development of a divisional structure
     (the Independent Producer division and the Career Agency division) within
     the Life Insurance segment.   This new divisional structure  will include
     centralized  support units  focused  on  product  development,  insurance
     administration,  and  customer  service,  while  retaining  the  distinct
     marketing attributes  of individual subsidiaries.   Severance and related
     costs of $34  million relate  to the elimination  of approximately  1,200
     positions,  which began  in  third quarter  1997.   The  positions  being
     eliminated relate to USLIFE's  corporate operations and to administrative
     service  functions  that are  being  centralized  within the  Independent
     Producer  division.    Costs  of  $37  million  to   eliminate  redundant
     facilities  relate to  contractual payments  under lease  obligations for
     facilities to be  vacated, primarily those utilized by USLIFE's corporate
     operations, and the write-off of mainframe computer equipment and related
     software  at various locations that will be centralized.  The integration
     of USLIFE  is proceeding as planned toward an expected completion date in
     mid-1998.  During third  quarter 1997, the Independent Producer  division
     combined  the operations  of  two broker-dealer  companies and  initiated
     processes  to  consolidate its  various  data center  operations  and the
     sharing of common insurance products.

     A valuation allowance for the deferred tax asset related to  a portion of
     USLIFE's net operating loss carryforward was  required as a result of the
     USLIFE acquisition in  second quarter 1997 since  it is more likely  than
     not that some portion of the deferred tax asset will not be realized.


                                                 -11-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

4.   Losses on Assets Held for Sale.   In June 1997, American General recorded
     a loss of  $113 million ($73 million aftertax) related  to disposition of
     non-strategic assets, consisting of a loss on the sale of underperforming
     credit card and private label finance receivable portfolios, and a charge
     relating  to the  planned  sale of  American  General's land  development
     operations and its small Canadian life insurance subsidiary.  The loss on
     the sale of receivables primarily resulted from establishing  a liability
     for  estimated  future  payments to  the  purchaser  of  the credit  card
     portfolio under a five-year loss sharing arrangement.

     On August  15, 1997,  American General  completed  the sale  of its  land
     development operations to Westbrook American Holding, L.P.  On  September
     29,  1997, the  company  announced a  definitive  agreement to  sell  its
     Canadian life insurance  subsidiary to a subsidiary  of Aetna, Inc.   The
     transaction,  which  is subject  to  requisite  regulatory approvals,  is
     expected to close by year-end 1997.

5.   Company-Obligated   Mandatorily   Redeemable   Preferred  Securities   of
     Subsidiary  (Preferred  Securities).   In  March  1997, American  General
     Institutional Capital B, a subsidiary  trust of American General,  issued
     500,000 shares, or $500 million, of non-convertible preferred securities.
     These securities pay semi-annual  cash dividends at an annual  rate of 8-
     1/8%.

     The  sole  assets  of  the  subsidiary  trust  are   Junior  Subordinated
     Debentures  (Subordinated Debentures)  issued by  American General.   The
     subsidiary  trust  has  no  independent  operations.    The  Subordinated
     Debentures are eliminated in the  consolidated financial statements.  The
     interest terms  and  other payment  dates of  the company's  Subordinated
     Debentures  held by  the  subsidiary trust  correspond  to those  of  the
     subsidiary trust's preferred securities.   American General's obligations
     under  the Subordinated  Debentures  and related  agreements, when  taken
     together, constitute a full  and unconditional guarantee of  payments due
     on the preferred securities.  The Subordinated Debentures  are redeemable
     at the  option of the company.  Upon such event, the preferred securities
     are redeemable on a proportionate basis.














                                                 -12-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

6.   Share  Repurchase.   On April  15, 1997,  American General  purchased 6.4
     million shares of  its common  stock in an  accelerated share  repurchase
     transaction.  The shares were purchased from  an investment bank for $234
     million based  on the April 14,  1997 closing price of  $36.50 per share,
     subject to a market price adjustment provision.  In order to complete the
     transaction, the  investment bank borrowed American  General common stock
     and purchased replacement shares in the open market.  On October 7, 1997,
     the transaction was completed at  a final price of $48.86 per  share, and
     American  General made a  cash payment of  $82 million  to the investment
     bank to settle  the transaction.   This payment included  changes in  the
     market price of American General common stock prior to settlement ($12.36
     per share) and a reimbursement for dividends paid on the borrowed shares.
     The settlement cost, which  is not reflected in the  consolidated balance
     sheet as  of September 30, 1997, will increase the cost of treasury stock
     in  fourth quarter  1997.   This transaction,  combined with  3.0 million
     shares repurchased since the announcement of the definitive  agreement to
     acquire   Home  Beneficial   Life,   had  the   effect  of   repurchasing
     substantially  all of  the  shares issued  in  the Home  Beneficial  Life
     acquisition.

7.   Derivative Financial Instruments.  During the nine months ended September
     30,  1997, the company purchased options to enter into interest rate swap
     agreements (call swaptions) with a total notional amount of $1.5 billion,
     to limit its exposure to declining interest rates over prolonged periods.
     During such  periods, the investment  spread (the difference  between the
     investment yield  and the interest  crediting rate) may  be reduced  as a
     result of certain limitations on the company's ability to manage interest
     crediting rates.   The  call swaptions  allow the company  to enter  into
     interest  rate swap  agreements  to receive  fixed  rates and  pay  lower
     floating rates, effectively increasing the investment spread.  Since  the
     call swaptions hedge insurance  and annuity liabilities, the fair  values
     of  the call  swaptions are  not recognized  in the  consolidated balance
     sheet.   The  associated fair  values, as  well as  the premiums  paid to
     purchase  the call swaptions, were  immaterial as of  September 30, 1997.
     No call swaptions were exercised as of September 30, 1997.

     During the nine months ended September 30, 1997, the company entered into
     interest  rate swap  agreements  with a  total  notional amount  of  $310
     million to convert specific investment securities or debt from a floating
     rate to a fixed rate basis,  and currency swap agreements with a notional
     amount of $40  million to  convert cash flows  from specific  investments
     denominated in Canadian dollars to U.S. dollars.

     Derivative  financial instruments  related  to investment  securities and
     debt  did  not have  a  material  effect on  net  investment income,  the
     weighted average borrowing rate, or  reported interest expense during the
     nine months ended September 30, 1997 or 1996.



                                                 -13-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

8.   New Accounting  Standards.   In February  1997, the  Financial Accounting
     Standards Board (FASB) issued Statement of Financial Accounting Standards
     (SFAS)  128, "Earnings per Share."  This statement, which changes certain
     requirements  for  computing  and   disclosing  earnings  per  share,  is
     effective  for interim and annual periods ending after December 15, 1997.
     Earlier  application  is  not permitted.    Restatement  for all  periods
     presented  will be required upon adoption.  Application of this statement
     will  change the company's disclosures related to earnings per share, but
     will not have a material impact on reported per share amounts.

     In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive Income,"
     which establishes standards  for reporting  and displaying  comprehensive
     income and its components in the financial statements.  This statement is
     effective for  interim and  annual periods  beginning after  December 15,
     1997.  Reclassification of financial statements for all periods presented
     will be required  upon adoption.  Application of  this statement will not
     change  recognition or measurement of net income and, therefore, will not
     impact  the company's  consolidated  results of  operations or  financial
     position.

     In June 1997, the FASB also issued SFAS 131, "Disclosures  about Segments
     of  an  Enterprise  and  Related  Information,"  which  changes  the  way
     companies report  segment information.   This statement is  effective for
     years  beginning after  December 15,  1997, but  need not  be applied  to
     interim  financial  statements  in   the  initial  year  of  application.
     Restatement  of comparative information for all periods presented will be
     required upon adoption.   Adoption of this statement  will result in more
     detailed segment disclosures but will not have an impact on the company's
     consolidated results of operations or financial position.

9.   Legal Contingencies.   Two real  estate subsidiaries of  American General
     were defendants  in a lawsuit that alleged  damages based on lost profits
     and  related  claims  arising  from  certain   loans  and  joint  venture
     contracts.    On  July  16,  1993, a  judgment  was  entered  against the
     subsidiaries for $47 million in compensatory damages and for $189 million
     in punitive damages.  On September 17, 1993, a Texas state district court
     reduced the previously awarded punitive damages by $60 million, resulting
     in a reduced judgment  in the amount  of $176 million plus  post-judgment
     interest of 10% from July 16, 1993.  On January 29, 1996, the Texas First
     Court  of Appeals  rendered  a decision  that  affirmed the  trial  court
     judgment  and held  both companies  liable to  pay the  punitive damages.
     Pursuant to court-ordered mediation,  the parties agreed to  a settlement
     of approximately $50 million as a final resolution of this lawsuit.  As a
     result,  American General recorded an  aftertax charge of  $33 million in
     second quarter 1997.





                                                 -14-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

     In  April  1992, the  Internal Revenue  Service  (IRS) issued  Notices of
     Deficiency for the 1977-1981 tax years of certain insurance subsidiaries.
     The basis of  the dispute was the  tax treatment of modified  coinsurance
     agreements.   The  company elected  to pay  all related  assessments plus
     associated interest, totaling $59 million.  A claim for refund of tax and
     interest was  disallowed by  the IRS in  January 1993.   In June  1993, a
     representative suit for refund  was filed in the  United States Court  of
     Federal  Claims.   In  February 1996,  the court  ruled  in favor  of the
     company on all legal issues related to this contingency, and the judgment
     entered  in  favor of  the  company for  the  portion of  the contingency
     related  to the representative case  was appealed by  the government.  On
     July 9, 1997,  the U.S. Court of Appeals for the Federal Circuit ruled in
     favor of  the company.  The  government recently determined that  it does
     not plan any further appeal.  American General has requested that the IRS
     refund all related assessments plus associated interest.

     In  recent years,  various life  insurance companies  have been  named as
     defendants in class  action lawsuits relating  to life insurance  pricing
     and sales  practices, and  a number  of these  lawsuits have  resulted in
     substantial settlements.  Certain  of American General's subsidiaries are
     defendants  in such  purported class  action lawsuits  filed in  1996 and
     1997, asserting claims  related to  pricing and sales  practices.   These
     claims  are being  defended vigorously  by the  subsidiaries.   Given the
     uncertain nature of litigation  and the early stages of  this litigation,
     the outcome of these actions cannot  be predicted at this time.  American
     General nevertheless  believes  that the  ultimate  outcome of  all  such
     pending  litigation should not have a material adverse effect on American
     General's consolidated  financial position; however, it  is possible that
     settlements or adverse determinations  in one or more of these actions or
     other future proceedings could have a material adverse effect on American
     General's  consolidated results  of operations  for a  given period.   No
     provision has been made in  the consolidated financial statements related
     to this pending litigation because the amount of loss, if any, from these
     actions cannot be reasonably estimated at this time.

     The company is a party to various  other lawsuits and proceedings arising
     in  the  ordinary  course  of  business.    Many  of these  lawsuits  and
     proceedings arise in jurisdictions, such  as Alabama, that permit  damage
     awards disproportionate  to the actual economic damages  incurred.  Based
     upon information presently available, the company believes that the total
     amounts that will ultimately be paid, if any, arising from these lawsuits
     and proceedings will not have a material adverse  effect on the company's
     consolidated  results of operations and financial  position.  However, it
     should  be noted  that the  frequency of  large damage  awards, including
     large punitive damage awards, that bear  little or no relation to  actual
     economic  damages incurred  by plaintiffs  in jurisdictions  like Alabama
     continues to  increase  and creates  the potential  for an  unpredictable
     judgment in any given suit.


                                                 -15-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1.  Financial Statements (continued).

10.  Tax  Return  Examinations.     The  company  and  the  majority   of  its
     subsidiaries file a  consolidated federal income tax return.   The IRS is
     currently examining the company's tax returns for 1988 through 1992.  The
     1988 tax  year has been settled with the exception of two issues that may
     be pursued in  the United States Tax  Court.  One issue  from tax returns
     prior to 1988 has been the subject of litigation, as described in Note 9.
     In  addition, certain tax returns of recently acquired companies are also
     being  examined.   Although the  final outcome  of these  examinations is
     uncertain, the  company believes  that the ultimate  liability, including
     interest, will not exceed amounts  recorded in the consolidated financial
     statements.





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

This  item presents  specific comments  on material  changes to  the company's
consolidated results  of operations, capital resources, and  liquidity for the
periods  reflected in the interim financial statements filed with this report.
The reader is  presumed to have read  or have access to  the company's Current
Report  on Form  8-K  dated  October 10,  1997  which  includes the  company's
consolidated balance sheets as of December  31, 1996 and 1995, and the related
consolidated  statements  of   income,  shareholders'  equity,  common   stock
activity,  and cash flows, and  Management's Discussion and  Analysis, for the
three years  ended December 31, 1996,  restated to reflect  the acquisition of
USLIFE under the pooling of interests method of accounting.

This  analysis should be read  in conjunction with  the consolidated financial
statements and related notes on pages 2 through 13 of this Quarterly Report on
Form 10-Q.

















                                                 -16-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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


                      CONSOLIDATED RESULTS OF OPERATIONS

                                 Nine Months Ended        Quarter Ended 
(In millions,                      September 30,          September 30,   
except share data)               1997         1996      1997         1996 

Net income                      $  312       $  558    $  226       $  199
Net income per share              1.27         2.24       .91          .80

Net income  for the  nine months ended  September 30, 1997  reflected aftertax
non-recurring charges  totaling $353  million ($1.41  per  share) recorded  in
second  quarter 1997.    The charges  included  merger-related costs  of  $247
million  in conjunction  with the  USLIFE acquisition  and the  Life Insurance
segment divisional realignment, $73 million in losses on  non-strategic assets
sold or held for sale, and $33 million for settlement of pending litigation by
a real estate subsidiary of American General.

Net  income for the prior year periods included aftertax non-recurring charges
of $18 million ($.07 per share) in third quarter 1996 for the anticipated loss
on  certain assets held for  sale, and $32 million ($.13  per share) in second
quarter 1996 to recognize revised assumptions reflecting current experience on
USLIFE's traditional indemnity group major medical business.

Excluding the non-recurring charges in 1997 and 1996, net income increased $57
million, or 9%, and  $9 million, or  4%, for the first  nine months and  third
quarter, respectively,  of 1997 compared to  the same periods in  1996.  These
increases  were primarily due to improved business segment earnings and higher
earnings on  corporate assets,  primarily on  assets of  the life  and annuity
subsidiaries  in excess  of those  needed to  support the  business, partially
offset by a decrease in net realized investment gains.


                               BUSINESS SEGMENTS

The company reports its business operations in three segments.   To facilitate
meaningful  period-to-period comparisons,  earnings of  each business  segment
include earnings from its business  operations and earnings on that  amount of
equity  considered necessary to support its business, and exclude net realized
investment gains (losses) and other non-recurring items.









                                                 -17-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Segment earnings were as follows:

                              Nine Months Ended          Quarter Ended 
                                September 30,            September 30,  
(In millions)                 1997         1996        1997         1996
 
Retirement Services           $186         $175        $ 59         $ 57 
Life Insurance                 424 (a)      399 (b)     146          139 
Consumer Finance                120 (c)     102          41           43 
 Segment earnings             $730         $676        $246         $239 

(a)  Excludes aftertax charges of $46 million for restructuring costs.

(b)  Excludes $32 million for write-down of USLIFE group business.

(c)  Excludes aftertax losses on assets held for sale of $27 million.

A  discussion  of  each  segment's  results follows.    The  reasons  for  any
significant  variations between the quarters ended September 30, 1997 and 1996
are  the same as those discussed below  for the respective nine month periods,
unless otherwise noted.

Retirement Services

The  Retirement  Services  segment  offers retirement  products  and  planning
services  to employees of educational,  health care, public  sector, and other
not-for-profit organizations.   Asset  growth through  sales and  deposits, as
well  as management of investment  spread on fixed  accounts, variable account
fees,  and  operating expenses,  contribute  to  the segment's  profitability.
Segment results were as follows:

                                Nine Months Ended         Quarter Ended
                                  September 30,           September 30,   
(In millions)                    1997       1996         1997       1996  

Segment earnings               $   186    $   175      $    59    $    57 
Assets
 Investments                    23,224     21,574       23,224     21,574 
 Separate Accounts              10,194      6,387       10,194      6,387 
Sales                            1,217        965          422        389 
Deposits
 Fixed                           1,180      1,181          336        370 
 Variable                        1,292        917          430        324 






                                                 -18-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Segment earnings  increased 7% for  the nine  months ended September  30, 1997
compared  to the same period of  1996, primarily due to  asset growth over the
past twelve  months.  Asset  growth, excluding  the fair  value adjustment  to
securities, was $5.1 billion, or 18%, from September 30, 1996 to September 30,
1997,  reflecting  strong sales,  an increase  in  total deposits,  and market
appreciation in Separate Accounts.

Sales for the nine months ended September 30, 1997 increased  $252 million, or
26%, compared to the same period in  1996, primarily due to increased sales of
the segment's new Portfolio Director  annuity product introduced in  mid-1996.
Variable deposits increased  41% for the nine months ended September 30, 1997,
compared to the  same period in 1996, as a  result of policyholders' continued
demand  for  equity investments  due to  the strong  performance of  the stock
market.   Sales and deposits in  third quarter 1997 compared  to third quarter
1996 increased at lower percentages than on a year-to-date basis due to strong
sales in 1996, immediately following the introduction of Portfolio Director 2.
Separate  Account assets, which relate  to variable account options, increased
$3.8 billion  from September 30, 1996  to September 30, 1997,  reflecting both
the increased sales and the strong market appreciation.

Investment results and crediting rates on fixed accounts were as follows:

                                  Nine Months Ended        Quarter Ended
                                    September 30,          September 30,  
($ in millions)                    1997       1996        1997       1996 

Net investment income             $1,274     $1,235      $ 429      $ 413 
Investment yield                    7.92%      8.06%      7.90%      8.02%
Average crediting rate              6.14       6.24       6.11       6.24 
Investment spread on
 fixed accounts                     1.78       1.82       1.79       1.78 

Net investment income, the primary component of revenues, increased 3% for the
first nine months of 1997 compared to the same period of 1996, reflecting a 5%
growth  in invested  assets  supporting fixed  account liabilities,  partially
offset by  a decrease in investment  yield due to the  declining interest rate
environment.  Investment yield  for the nine  months ended September 30,  1997
decreased 14 basis points compared to the same period in 1996.  In response to
the   declining  yield,  the  company  adjusted  the  rates  credited  to  its
policyholders  during 1997.    As a  result, the  investment  spread on  fixed
accounts for  the first nine  months of 1997  declined only 4 basis  points in
comparison to  the first nine months  of 1996 and increased 1  basis point for
third quarter 1997 compared to third quarter 1996.

Variable  account  fees,  included   in  premiums  and  other  considerations,
increased $28 million, or 54%, for  the first nine months of 1997  compared to
the  same period in 1996 due to strong sales growth and market appreciation in
Separate Accounts.

                                                 -19-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

The rate of policyholder surrenders as  a percentage of average fixed deferred
annuity  and Separate Account reserves was 5.08%  for the first nine months of
1997  compared to 4.97% for the same period  in 1996.  The surrender ratio for
third quarter 1997 was 5.23% compared to  4.67% for third quarter 1996, due to
lower interest crediting  rates on fixed  accounts, early retirement  packages
offered  by  certain  large  public  school  groups,  and   higher  systematic
withdrawals, which  allow participants  to receive automatic  payments over  a
five or ten year period.

The  ratio of operating  expenses to average  assets improved to  .48% for the
first nine months  of 1997 from  .51% for the  same period of  1996 due to  an
increase in  average assets, which more  than offset an increase  in operating
expenses primarily related to technology expenses.

Life Insurance

The Life  Insurance segment  provides traditional and  interest-sensitive life
insurance and annuities  to customers  based on household  income and  product
needs.  Following completion of the USLIFE merger,  the company realigned this
segment into two  divisions based  on distribution systems  and market  focus.
The  new divisions are the Independent Producer division and the Career Agency
division.   The divisional structure  is designed to  strengthen the company's
distribution system  while achieving operating efficiencies,  improved product
development, and enhanced customer service.

Segment profitability is a function of premiums, investment spread, mortality,
and operating expenses.  Segment results were as follows:

                          Nine Months Ended              Quarter Ended
                            September 30,                September 30,    
(In millions)             1997          1996            1997        1996  

Segment earnings        $    424 (a)  $    399 (b)    $    146    $    139
Premiums and other 
 considerations            2,254         2,217             764         750
Assets                    34,656        32,314          34,656      32,314
Net investment income      1,561         1,508             527         508

(a)  Excludes aftertax charges of $46 million for restructuring costs.

(b)  Excludes $32 million for write-down of USLIFE group business.

Segment earnings  for the nine  months ended September  30, 1997 increased  6%
compared  to the  same period  of 1996,  primarily due to  additional earnings
generated by the acquisition of Home Beneficial Life (acquired April 16, 1997)
and  Independent Life  (acquired  February  29,  1996).    The  earnings  from
acquisitions were partially offset by higher amortization and reduced deferral
of deferred policy acquisition costs.

                                                 -20-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Asset  growth, excluding  the fair  value adjustment  to securities,  was $1.7
billion, or 5%, from September 30, 1996 to September 30, 1997 primarily due to
the  acquisition of  Home  Beneficial Life,  increased  sales, and  additional
deposits.

Net investment  income increased $53  million, or 3%,  for the nine  months of
1997 compared to the same period  in 1996, primarily due to growth  in average
assets, which included the Home Beneficial Life acquisition.  Year-to-date and
quarter-to-date average  investment yields  decreased 7  and 11  basis points,
respectively,  primarily  due  to  lower  interest  rates  on  new  investment
purchases.

Information regarding sales and deposits was as follows:

                              Nine Months Ended        Quarter Ended
                                September 30,          September 30,  
(In millions)                  1997       1996        1997       1996 

Life Insurance
 Sales                        $  390     $  354      $  133     $  114
 Deposits                        859        792         294        261
Annuities
 Sales                           308        292         114         90
 Deposits                        372        348         121        106

Life  insurance  sales  and deposits  for  the nine  months  of  1997 exceeded
comparable  1996 amounts by 10%  and 8%, respectively, due  to a number of new
marketing  initiatives, including  the introduction  of a  corporate executive
benefits  product  in  second  quarter  1997,  and  the  acquisition  of  Home
Beneficial Life.    Annuity sales  and  deposits  for the  nine  months  ended
September   30,  1997  exceeded  comparable   1996  amounts  by   6%  and  7%,
respectively,  (and  for  the  quarter  ended   September  30,  1997  exceeded
comparable  1996  amounts  by 27%  and  15%,  respectively)  primarily due  to
increased structured settlement sales, partially offset by lower fixed annuity
sales in the first half of 1997 due to competitive market conditions.

Death  claims, included in insurance  and annuity benefits,  increased 5% from
1996  to 1997, primarily due to the  acquisitions of Independent Life and Home
Beneficial  Life.  Death claims per $1,000 of in force were $3.35 for the nine
months  of 1997  compared to  $3.29 for  the same  period in  1996.   Overall,
mortality experience was within product pricing assumptions.








                                                 -21-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

The ratio of  operating expenses to direct premiums and  deposits increased to
17.05% for  the first nine  months of  1997, compared to  16.60% for the  same
period in  1996.  The increase was primarily due to Home Beneficial Life's and
Independent Life's expense ratios, which exceeded those of the company's other
life insurance  subsidiaries.  Anticipated expense  savings from consolidation
of  these acquired companies' operations are  proceeding as expected; however,
the expense savings have not  been fully realized to  date.  In addition,  the
segment experienced  higher technology  and marketing  expenses.  The  expense
ratio for third quarter 1997 declined slightly to 17.20% compared to 17.26% in
the  same period of  1996, due to  expense reductions at  Independent Life and
higher life insurance deposits in third quarter 1997.

Consumer Finance

The Consumer Finance segment provides consumer and home equity loans and other
credit-related products.  Segment results are influenced by the amount and mix
of  finance  receivables,  credit   quality,  borrowing  cost,  and  operating
expenses.  Segment results were as follows:

                                Nine Months Ended        Quarter Ended
                                  September 30,          September 30,    
($ in millions)                  1997       1996       1997         1996  

Segment earnings                $  120 *   $  102     $   41       $   43  
Finance receivables              7,526      8,208      7,526        8,208  
Yield on finance receivables     16.96%     18.02%     16.83%       17.80% 
Borrowing cost                    6.80       6.90       6.90         6.87  
Spread                           10.16      11.12       9.93        10.93  

* Excludes aftertax losses on assets held for sale of $27 million.

Segment  earnings for the nine  months ended September  30, 1997 increased $18
million,  or 17%, compared  to the  same period of  1996, primarily due  to an
improvement in  credit quality during 1997.   For third quarter  1997, segment
earnings  were  down  $2 million,  or  6%,  compared  to  third quarter  1996,
primarily due  to a larger  reduction in the allowance  for finance receivable
losses  in third quarter  1996, partially offset  by an improvement  in credit
quality in third quarter 1997.

The  company's   strategy  in  prior  years   of  emphasizing  higher-yielding
receivables,  with  higher credit  risk, resulted  in higher  than anticipated
levels of delinquencies and charge offs  beginning in third quarter 1995.  The
company responded by initiating  an action program to improve  credit quality,
beginning  with a comprehensive review  of the consumer  finance operations in
fourth  quarter 1995.   This review indicated  a need  for an increase  in the
allowance  for  losses on  finance  receivables.   As  a  result,  the company
increased the allowance $216 million ($140 million aftertax) in fourth quarter
1995.

                                                 -22-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Other  components   of  the  action  program   included  raising  underwriting
standards,  slowing  branch  expansion,  increasing  collection  efforts,  and
rebalancing  the finance  receivable portfolio  to increase the  proportion of
real  estate-secured  receivables.    The proportion  of  real  estate-secured
receivables  increased to  51%  at  September 30,  1997,  compared to  42%  at
September 30, 1996, primarily  due to purchases of real estate loan portfolios
during  the last three  months of 1996  totaling $277 million  and real estate
loan growth during 1997.

Total  finance receivables  decreased $99  million from  December 31,  1996 to
September 30, 1997 and $682 million  during the twelve months ended  September
30, 1997.   All lines of receivables, except for  real estate-secured consumer
loans, decreased  compared to December 31,  1996 and September 30,  1996.  The
decreases were due to  management's action program to improve  credit quality,
and the  reclassification of certain  finance receivable portfolios  to assets
held for sale in December 1996.  These portfolios consisted of $520 million of
bank  credit  card  receivables and  $355  million  of  private label  finance
receivables at December  31, 1996.  The company recognized  an aftertax charge
of $93 million in fourth quarter 1996 related to the assets held for sale.  In
April 1997,  the company repurchased $100 million  of private label and credit
card  receivables that  previously had  been sold through  securitization, and
offered  $70 million  of that  portfolio  for sale  with  the company's  other
finance receivables held for sale.

In  June  1997, the  company sold  all of  the  assets held  for sale  (with a
remaining balance  of $658  million) and $81  million of  other private  label
finance receivables.   In  connection with  these sales, the  company took  an
aftertax charge of $27 million  in second quarter 1997.  This  additional loss
primarily resulted from establishing a liability for estimated future payments
to the purchaser  of the credit card portfolio under  a five-year loss sharing
arrangement.

Finance charge  revenues decreased  $143 million, or  13%, for the  first nine
months of  1997  and $44  million, or  12%,  for the  third quarter  of  1997,
compared  to  the  same  periods  in  1996,   due  to  lower  average  finance
receivables, combined with a decline in the yield on finance receivables.

The yield on finance receivables declined 106 basis points for  the first nine
months  of 1997 and 97 basis points for the third quarter of 1997, compared to
the same  periods in 1996.  The yield decline  resulted from the change in the
portfolio  mix  to a  higher proportion  of  real estate-secured  loans, which
generally have lower yields,  partially offset by the decreased  proportion of
non-accrual  delinquent finance receivables  during 1997.   The spread between
yield and  borrowing cost decreased 96  basis points and 100  basis points for
the first  nine months of  1997 and the  third quarter of  1997, respectively,
compared to the same periods of 1996.  These declines resulted from a decrease
in yield, partially offset by lower borrowing cost on a year-to-date basis and
increased by higher borrowing cost in third quarter 1997.

                                                 -23-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Charge  offs, delinquencies, and  the allowance for  finance receivable losses
were as follows:

                                   Nine Months Ended       Quarter Ended
                                     September 30,         September 30,   
($ in millions)                     1997       1996       1997       1996  

Charge offs                        $ 202      $ 328      $  61      $ 107 
  % of average finance 
   receivables                      3.59%      5.40%      3.27%      5.37%

                                     September 30,   
                                    1997       1996  
Delinquencies                      $ 312      $ 380 
  % of finance receivables          3.83%      4.28%

Allowance for finance 
 receivable losses                 $ 380      $ 465 
  % of finance receivables          5.05%      5.67%

The  charge  off, delinquency,  and allowance  ratios  decreased for  the nine
months ended September 30, 1997 compared to the same period in 1996, primarily
due to  improved credit quality  related to  the increased proportion  of real
estate-secured receivables and the reclassification and sale of non-strategic,
underperforming finance receivable portfolios.   Excluding the portfolios held
for  sale,  the charge  off  and  delinquency  ratios were  4.59%  and  3.93%,
respectively, for the nine months ended September 30, 1996.

The  delinquency ratio  at  September 30,  1997 was  unchanged  from 3.83%  at
December 31, 1996.  Excluding the receivable portfolios reclassified to assets
held for sale, the charge off ratio has decreased as follows:

  Quarter Ended       Quarter Ended     Quarter Ended       Quarter Ended
December 31, 1996     March 31, 1997     June 30, 1997     September 30, 1997

      5.03%               3.83%              3.68%               3.27%

These  decreases  resulted from  the  positive impact  of  management's action
program to improve  credit quality.   The allowance  ratio decreased 13  basis
points from 5.18% at December 31, 1996 to 5.05% at September 30, 1997 due to a
$15  million decrease in  the allowance for finance  receivable losses in 1997
resulting from improved credit quality of the receivables portfolio, partially
offset by a decrease in average finance receivables.






                                                 -24-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Operating expenses  decreased $35 million,  or 9%,  for the nine  months ended
September 30, 1997, compared  to the same period in 1996.   As a percentage of
average finance receivables, operating  expenses were 6.08% and 6.17%  for the
nine months  ended September 30, 1997 and 1996, respectively.  The decrease in
operating  expenses was primarily due  to exclusion of  the operating expenses
associated  with servicing the portfolios held  for sale, decreased collection
expenses, and lower expenses due to workforce reduction, partially offset by a
decrease in deferral of finance receivable origination costs.


                                  INVESTMENTS

Invested assets consist primarily of fixed maturity securities, mortgage loans
on real estate, policy loans, and investment real estate.  The company reviews
invested  assets on a  regular basis and  records write-downs for  declines in
fair value below cost that are considered other than temporary.

Fair Value  of Securities  (SFAS 115).   The components  of the  adjustment to
report  fixed maturity and  equity securities at  fair value  at September 30,
1997 and December 31, 1996, and the change, were as follows:

                                   September 30,   December 31,
(In millions)                          1997            1996        Change 

Fair value adjustment to 
 fixed maturity securities            $ 2,268        $ 1,488      $   780 
Adjusted by:
  Decrease in DPAC/CIP                   (837)          (598)        (239)
  Increase in deferred income taxes      (523)          (339)        (184)
Equity in WNC's unrealized gains           29             59          (30)
Net unrealized gains on 
 fixed maturity securities                937            610          327 
Net unrealized gains on equity
 securities                                16             17           (1)
  Net unrealized gains on
   securities                         $   953        $   627      $   326 

Accounting  rules do  not permit  adjustment to  fair  value of  the insurance
liabilities  supported by  these  securities, thereby  creating volatility  in
shareholders' equity  as interest rates change.   Care should be  exercised in
drawing conclusions based  on balance  sheet amounts that  are only  partially
adjusted to fair value.







                                                 -25-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Fixed Maturity  Securities.   Fixed  maturity  securities represented  89%  of
invested  assets at  September  30, 1997.    Information regarding  the  fixed
maturity securities  portfolio, which included bonds  and redeemable preferred
stocks, at September 30, 1997 was as follows:

                                 September 30,              Average Credit
(In millions)                        1997           %           Rating    

Investment grade                    $36,174         76%          A   
Mortgage-backed                       9,392         20           AAA 
Below investment grade                1,991          4           BB- 
 Total fixed maturities             $47,557        100%          A+  

Mortgage-backed  securities (MBSs),  consisting principally  of collateralized
mortgage  obligations,   are  purchased   to  diversify  the   portfolio  risk
characteristics from  primarily corporate credit risk  to a mix  of credit and
cash flow risk.  MBSs represented 20%  and 24% of fixed maturity securities at
September  30,  1997  and December  31,  1996,  respectively.   The  reduction
represents  the company's actions  to reduce  its exposure  to cash  flow risk
associated with these investments.

Below investment grade fixed maturity securities, those rated below BBB-, were
$2.0  billion at  September 30, 1997  and $1.7  billion at  December 31, 1996.
These  investments represented 4% of  total fixed maturity  securities at both
balance  sheet dates.   Investment  income from  below investment  grade fixed
maturity  securities was  $126 million  and  $121 million  for the  first nine
months of 1997  and 1996,  respectively.  Realized  investment gains  (losses)
were immaterial.

Non-performing  fixed maturity  securities,  defined as  securities for  which
payment  of interest  is  sufficiently uncertain  as  to preclude  accrual  of
interest,  represented less  than  .03%  and  .01%  of  total  fixed  maturity
securities at September 30, 1997 and December 31, 1996, respectively.

Mortgage Loans.   Mortgage loans  on real  estate represented  6% of  invested
assets  at  September  30, 1997.    Information  regarding  the mortgage  loan
portfolio at September 30, 1997 was as follows:

                                September 30,    Non-Performing Loans
(In millions)                       1997           Amount        % 

Commercial loans                   $ 3,319         $ 189        5.7%
Allowance for losses                   (61)          (24)
  Total mortgage loans             $ 3,258         $ 165 





                                                 -26-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Non-performing mortgage loans  include loans  delinquent 60 days  or more  and
commercial loans  that have  been  restructured and  are currently  performing
under the  modified terms.   These loans represented 5.7%  of total commercial
loans at September 30, 1997, compared to 5.1% at December 31, 1996.

At  September 30, 1997, $168  million of performing  commercial mortgage loans
were included on the company's watch  list because they were either delinquent
30-59 days, the borrower  was in bankruptcy, or the loan was  determined to be
undercollateralized.  This  amount compares  to $286 million  at December  31,
1996.   The decrease in the watch list  amount was primarily due to loans that
are  no longer  undercollaterized or were  reinstated, refinanced,  or repaid.
While the watch list loans may be predictive of higher non-performing loans in
the   future,  the  company  does  not  anticipate  a  significant  effect  on
operations, liquidity, or capital from these loans.

Realized Investment Gains (Losses). Realized investment gains (losses) were as
follows:

                                                    Nine Months Ended
                                                      September 30,  
(In millions)                                        1997       1996 

Sales
  Fixed maturity securities                         $ (11)      $ (7)
  Equity securities                                     4         50
  Real estate and other long-term investments          25          7
Write-downs/reserve changes                            12          7 
Other                                                  (5)         -
  Total realized investment gains (losses)          $  25       $ 57

The 1997 write-downs/reserve changes resulted  from the reversal of allowances
on   mortgage  loans  due  to  improved  credit  quality.    The  1996  write-
downs/reserve  changes resulted from the reversal  of allowances on investment
real estate.

Investment Real Estate.   Investment real estate consists of  land development
projects,  income-producing  real  estate,  foreclosed real  estate,  and  the
American  General Center,  an office complex  in Houston.   In  June 1997, the
company  signed  a  definitive agreement  to  sell  the majority  of  its land
development projects; the sale closed in August 1997.  In conjunction with the
sale of these non-strategic assets, the company recognized an aftertax loss of
approximately $45  million, including expenses  associated with  the sale,  in
second quarter 1997.






                                                 -27-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

                               CAPITAL RESOURCES

Corporate  Debt.  Corporate debt  is incurred primarily  to fund acquisitions,
share repurchases, and capital needs of subsidiaries. Corporate debt decreased
$77 million from December 31, 1996 to September 30, 1997, primarily due to the
net  proceeds from the March 1997 issuance  of 8-1/8% preferred securities and
dividends  paid by subsidiaries, partially offset by an increase in borrowings
to fund repurchases of American General's common stock and the Home Beneficial
Life acquisition.

Interest  expense on corporate debt decreased $4  million, or 3%, for the nine
months ended September  30, 1997  compared to the  same period in  1996.   The
decrease relates to lower average short-term borrowings resulting from the use
of the proceeds of preferred securities issued in December 1996 and March 1997
to reduce short-term debt.

The ratio of  corporate debt  to corporate capital  (excluding the fair  value
adjustment to securities)  was 20.0% at September 30, 1997,  compared to 22.0%
at December 31, 1996.   Management expects to  maintain the ratio at or  below
25% during the remainder of 1997.

Consumer Finance Debt.   The  capital of American  General's Consumer  Finance
segment varies directly  with the amount  of finance receivables  outstanding.
The mix of  capital between debt and equity is  based primarily on maintaining
leverage  at a level that  supports cost-effective funding.   Consumer finance
debt decreased  $774 million  from December 31,  1996 to  September 30,  1997,
primarily due to the sale of the underperforming credit card and private label
finance receivable portfolios.

Interest  expense on Consumer  Finance debt decreased $26  million, or 7%, for
the nine months ended September 30, 1997, compared to the same period in 1996,
primarily due  to the lower level  of debt and the  reclassification to assets
held for sale of interest expense on non-strategic assets sold in June 1997.

Redeemable Equity.  Redeemable equity increased $499 million from December 31,
1996 to September 30, 1997, due to the March 1997 issuance of 8-1/8% preferred
securities.  Net proceeds  from this issuance  were used to reduce  short-term
corporate debt.

Shareholders' Equity.   Shareholders'  equity increased  from $6.8  billion at
December 31, 1996 to $7.3 billion at September 30, 1997,  primarily due to the
$326 million increase in net unrealized gains on securities.

Due to the requirements of certain accounting rules, shareholders' equity will
be subject to future volatility from the effects of interest rate fluctuations
on the fair value of  securities (see "Investments - Fair Value  of Securities
(SFAS 115)" on page 22).


                                                 -28-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Rating Agencies.  As a  result of the acquisition of USLIFE, Standard & Poor's
(S&P), Duff  & Phelps (D&P), Moody's,  and A.M. Best conducted  reviews of the
debt,  preferred securities,  and  claims-paying ability  ratings of  American
General and its subsidiaries.  Based on these reviews, several ratings changed
and all ratings were removed from review by the rating agencies.

In  conjunction  with  the company's  September  12,  1997  announcement of  a
definitive  agreement to acquire the remaining 54% equity ownership of Western
National, S&P, D&P, and Moody's affirmed all of American General's ratings.

As of November 10, 1997, the ratings were as follows:

                                        S&P     D&P    Moody's   A.M. Best
Debt and preferred securities
 ratings:
  American General Corporation
   Commercial paper                    A-1+    D-1+      P-1
   Long-term debt                      AA-     AA-       A2
   Preferred securities                A+      A         a2

  American General Finance 
   Corporation
    Commercial paper                   A-1     D-1+      P-1
    Long-term debt                     A+      A+        A2

Claims-paying ability ratings:
  All American Life                    AA+               Aa3        A+
  American General Life and Accident   AA+     AAA                  A++
  American General Life                AA+     AAA       Aa3        A++
  Franklin Life                        AA+     AAA       Aa3        A++
  Old Line Life                        AA+               Aa3        A+
  United States Life                   AA+               Aa3        A+
  VALIC                                AA+     AAA       Aa2        A++

Year 2000 Contingency.  Management has been  engaged in a company-wide program
to  render  its   computer  systems  (hardware  and   mainframe  and  personal
applications  software) year  2000 compliant.   The  company will  continue to
incur internal staff costs as well as third-party vendor and other expenses to
prepare the systems  for year  2000.  The  cost of  testing and conversion  of
systems applications  has not had,  and is  not expected to  have, a  material
adverse  effect  on  the  company's  consolidated  results  of  operations  or
financial  condition.    However,  risks  and  uncertainties  exist   in  most
significant  systems development  projects.   If  conversion of  the company's
systems is  not completed on a  timely basis, due to  nonperformance by third-
party vendors or other  unforeseen circumstances, the year 2000  problem could
have a material adverse impact on the operations of the company.



                                                 -29-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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


                                   LIQUIDITY

Management believes that the  overall sources of cash and  liquidity available
to  the company  will continue  to be  sufficient  to satisfy  its foreseeable
financial obligations.

Dividends from subsidiaries  are one of  the primary sources  of cash for  the
parent  company's operating requirements and are used to fund debt repayments,
dividends to shareholders, acquisitions, and repurchases of American General's
common  stock.   American General's insurance  subsidiaries are  restricted by
state insurance laws as to the amounts they may pay as dividends without prior
notice  to,  or in  some  cases prior  approval from,  their  respective state
insurance  departments.    Certain non-insurance  subsidiaries  are  similarly
restricted  by  long-term  debt  agreements.    These  restrictions  have  not
affected, and are not expected  to affect, the ability of the company  to meet
its cash obligations.

Parent Company Cash Flows
                                                   Nine Months Ended 
                                                     September 30,    
(In millions)                                      1997         1996  

Net cash provided by operating activities         $  238       $  404 
Dividends paid by Life Insurance and
 Retirement Services segments                        328          301 
Dividends paid by Consumer Finance segment           127          139 

Net cash provided  by operating activities decreased in the  first nine months
of 1997 compared  to the same period  in 1996 primarily due to  an increase in
federal income taxes paid and payment of a litigation settlement and a portion
of  the USLIFE merger-related transaction costs.  During the first nine months
of 1997, the Life Insurance and Retirement Services segments paid $471 million
of cash dividends  to subsidiaries of American General, of  which $328 million
was dividended to the parent company.














                                                 -30-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Segment Cash Flows
                                                   Nine Months Ended 
                                                     September 30,    
(In millions)                                      1997         1996  

Life Insurance and Retirement Services
 Net cash provided by operating activities        $1,476       $1,457   
 Net cash provided by (used for) policyholder
   account deposits, net of withdrawals
    Fixed                                             (8)         125   
    Variable                                       1,423        1,337   
Consumer Finance
 Net cash provided by operating activities           374          477   

Net  cash  flows  generated by  the  Life  Insurance  and Retirement  Services
segments  include cash provided by operating activities and fixed policyholder
account  deposits, net of withdrawals.   Cash flows  from operating activities
were  relatively flat in the first nine months of 1997 compared to 1996.  Cash
provided by fixed account deposits decreased by $133 million, primarily due to
a $204 million increase in fixed account withdrawals in the  first nine months
of 1997.   The increases in both fixed withdrawals  and net variable deposits,
which  include transfers from fixed accounts, were the result of policyholders
seeking higher  returns in  equity-based investments, including  the company's
Separate Accounts.  Because the investment risk on variable accounts lies with
the  policyholder, deposits and  withdrawals related to  Separate Accounts are
not included in the company's consolidated condensed statement of cash flows.

The Consumer Finance segment's cash provided by operating activities decreased
$103  million in  the first  nine months  of 1997 compared  to the  first nine
months of 1996 primarily due to decreased finance charge revenues attributable
to lower average net receivables.

Consolidated  Operating Activities.  Net cash  flows from operating activities
on  a consolidated  basis  decreased $502  million in  the  nine months  ended
September 30,  1997 compared  to  the same  period in  1996  primarily due  to
payment of USLIFE merger-related costs  and a litigation settlement, increased
federal  income taxes  paid,  and decreased  finance  charge revenues  in  the
Consumer Finance segment.











                                                 -31-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





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

Investing  Activities.   Cash flows  related to  investing activities  were as
follows:
                                                        Dispositions and
                                     Purchases             Repayments     
                                 Nine Months Ended      Nine Months Ended
(In millions)                      September 30,          September 30,   
                                 1997         1996      1997         1996 
Fixed maturity securities       $9,047       $7,019    $7,563       $5,980 
Mortgage loans                     220          323       595          352 
Equity securities                    2            1        70          161 
Other                               54           87       506          116 
  Total                         $9,323       $7,430    $8,734       $6,609 

Credit  Facilities.   American  General and  certain  of its  subsidiaries use
commercial  paper to  meet  short-term funding  requirements.   Unsecured bank
credit  facilities  are  used to  support  commercial  paper  borrowings.   At
September  30, 1997,  committed credit  facilities totaled  $3.6  billion, and
there were no borrowings under these facilities.


                          FORWARD-LOOKING STATEMENTS

The  statements contained in this filing on  Form 10-Q that are not historical
facts  are  forward-looking  statements  within  the  meaning  of the  Private
Securities Litigation Reform Act.   Actual results may differ  materially from
those  included  in the  forward-looking  statements.   These  forward-looking
statements  involve risks and uncertainties including, but not limited to, the
following:  changes in general economic conditions,  including the performance
of  financial markets, interest rates, and the level of personal bankruptcies;
customer  responsiveness  to  both  new products  and  distribution  channels;
competitive, regulatory,  or tax changes that affect the cost of or demand for
the company's products; adverse  litigation results; the company's  ability to
render its computer  systems year 2000 compliant; and the company's failure to
achieve  anticipated levels of earnings or operational efficiencies related to
recently  acquired  companies,  as  well  as  other  cost-saving  initiatives.
Investors  are also  directed to  other risks  and uncertainties  discussed in
documents filed by the company with the Securities and Exchange Commission.












                                                 -32-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





                          PART II.  OTHER INFORMATION

Item 1. Legal Proceedings.

In  April 1992,  the IRS issued  Notices of  Deficiency for  the 1977-1981 tax
years of certain insurance subsidiaries.  The basis of the dispute was the tax
treatment of modified coinsurance agreements.  The company elected to pay  all
related assessments plus associated  interest, totaling $59 million.   A claim
for refund of tax and interest was disallowed by the IRS in January 1993.   In
June  1993, a representative  suit for refund  was filed in  the United States
Court of  Federal Claims (Gulf Life  Insurance Co. v. United  States, C.A. No.
93-404T).  In  February 1996, the court  ruled in favor of the  company on all
legal issues related to this contingency, and the judgment entered in favor of
the company for the portion of  the contingency related to the  representative
case was  appealed by  the government.   On July  9, 1997,  the U.S. Court  of
Appeals for the Federal Circuit ruled in favor of the company.  The government
recently  determined that  it  does not  plan  any further  appeal.   American
General  has  requested  that the  IRS  refund  all  related assessments  plus
associated interest.

In  recent  years,  various  life  insurance  companies  have  been  named  as
defendants in class  action lawsuits  relating to life  insurance pricing  and
sales practices,  and a number of these  lawsuits have resulted in substantial
settlements.   Certain  of American  General's subsidiaries are  defendants in
such purported class  action lawsuits filed in 1996 and 1997, asserting claims
related  to pricing  and sales  practices.   These claims  are being  defended
vigorously by the subsidiaries.  Given the  uncertain nature of litigation and
the early  stages of this litigation,  the outcome of these  actions cannot be
predicted  at  this time.   American  General  nevertheless believes  that the
ultimate  outcome of  all such pending  litigation should not  have a material
adverse effect on American General's consolidated financial position; however,
it is  possible that settlements or  adverse determinations in one  or more of
these actions or other future proceedings could have a material adverse effect
on American General's consolidated  results of operations for a  given period.
No provision has been made in the consolidated financial statements related to
this pending  litigation because the  amount of the  loss, if any,  from these
actions cannot be reasonably estimated at this time.

In  addition to  those  lawsuits or  proceedings disclosed  herein and  in the
company's Current Report on Form 8-K filed on October 10, 1997, the company is
a party  to various  other lawsuits  and proceedings arising  in the  ordinary
course  of  business.   Many  of  these  lawsuits  and  proceedings  arise  in
jurisdictions, such as Alabama, that  permit damage awards disproportionate to
the  actual  economic  damages incurred.    Based  upon information  presently
available, the company believes that the total amounts that will ultimately be
paid, if  any, arising from  these lawsuits  and proceedings will  not have  a
material adverse effect  on the company's  consolidated results of  operations
and  financial position.  However, it should be  noted that the frequency of  




                                                 -33-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997





Item 1. Legal Proceedings (continued).

large  damage awards, including large punitive damage awards, that bear little
or   no  relation  to  actual  economic  damages  incurred  by  plaintiffs  in
jurisdictions like Alabama continues to increase and creates the potential for
an unpredictable judgment in any given suit.

Item 5.  Other Information.

Executive Officers

Information regarding the 13 executive officers of the company is as follows:

                                       Present Principal Position with
                                       the Company and Other Material
     Name and Age                   Positions Held during Last Five Years    

Robert M. Devlin                Chairman  (since  1997)  and  Chief  Executive
(57)                            Officer (since 1996),  Director (since  1993),
                                President (1995-97), and Vice  Chairman (1993-
                                95),  American General  Corporation; President
                                and   Chief   Executive   Officer   (1986-93),
                                American   General  Life   Insurance  Company,
                                Houston,  Texas,  a  subsidiary   of  American
                                General   Corporation.      Director,   Cooper
                                Industries, Inc.

James S. D'Agostino Jr.         President  (since  1997)  and Director  (since
(51)                            1996), American  General Corporation; Chairman
                                (1995-97), Chief  Executive Officer (1993-97),
                                and President (1993-95), American General Life
                                and  Accident  Insurance  company,  Nashville,
                                Tennessee,  a  subsidiary of  American General
                                Corporation; with American General Corporation
                                during  the  remainder of  last five  years in
                                various  other capacities  including Executive
                                Vice President - Administration (1993).

Jon P. Newton                   Vice  Chairman  and  Director   (since  1995),
(56)                            Vice Chairman and  General Counsel  (1995-97),
                                and  Senior Vice President and General Counsel
                                (1993-95),   American   General   Corporation.
                                Partner  (1985-93),  Clark, Thomas,  Winters &
                                Newton, Austin, Texas.

Mark S. Berg                    Senior  Vice  President  and  General  Counsel
(39)                            (since  1997),  American General  Corporation.
                                Partner  (1991-97),  Vinson  & Elkins  L.L.P.,
                                Houston, Texas.



                                                 -34-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997




Item 5.  Other Information (continued).

                                       Present Principal Position with
                                       the Company and Other Material
     Name and Age                   Positions Held during Last Five Years    

Frederick W. Geissinger         President and Chief  Executive Officer  (since
(52)                            1995),   American   General   Finance,   Inc.,
                                Evansville, Indiana, a subsidiary  of American
                                General   Corporation;  President   and  Chief
                                Executive Officer  (1994-95), American General
                                Land  Development,  Inc.,  Houston,  Texas,  a
                                subsidiary  of  American General  Corporation.
                                Independent  Consultant  (1992-94), New  York,
                                New York.

Albert E. Haines                Senior Vice President -  Administration (since
(53)                            1996),    American    General     Corporation.
                                President (1992-96), Chamber of  Commerce, The
                                Greater Houston Partnership, Houston, Texas.

Joe Kelley                      President  (since  1995)  and Chief  Executive
(50)                            Officer  (since  1997), American  General Life
                                and  Accident  Insurance  Company,  Nashville,
                                Tennessee,  a  subsidiary of  American General
                                Corporation; Senior Vice  President and  Chief
                                Marketing Officer  (1994-95), American General
                                Life  Insurance  Company,  Houston,  Texas,  a
                                subsidiary  of  American General  Corporation.
                                Senior  Vice  President (1992-94),  Prudential
                                Preferred Financial Services, Houston, Texas.

Rodney O. Martin Jr.            President (since 1997), American  General (45)
                                Independent Producer Division, Houston, Texas,
                                a subsidiary of American  General Corporation;
                                President and Chief  Executive Officer  (since
                                1996),   American   General   Life   Insurance
                                Company,  Houston,  Texas,  a   subsidiary  of
                                American  General  Corporation; President  and
                                Chief  Executive  Officer (1995-96),  American
                                General  Life Insurance  Company of  New York,
                                Syracuse, New York,  a subsidiary of  American
                                General  Corporation.    President  (1993-95),
                                Connecticut    Mutual   Insurance    Services,
                                Hartford,Connecticut.  Senior Vice President -
                                 Corporate Distribution (1992-93), Connecticut
                                Mutual   Life  Insurance   Company,  Hartford,
                                Connecticut.





                                                 -35-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997




Item 5.  Other Information (continued).

                                       Present Principal Position with
                                       the Company and Other Material
     Name and Age                   Positions Held during Last Five Years    


Ellen H. Masterson              Senior  Vice  President  and  Chief  Financial
(46)                            Officer   (since   1997),   American   General
                                Corporation.    Partner  (1985-97), Coopers  &
                                Lybrand L.L.P., Dallas, Texas.

Nicholas R. Rasmussen           Senior Vice President  (since 1983) and Senior
(51)                            Vice President - Corporate  Development (since
                                1993),  and  Senior  Vice  President  -  Group
                                Executive    (1990-93),    American    General
                                Corporation.

Carl J. Santillo                Senior Vice President (since 1997), and Senior
(48)                            Vice President -  Finance (1996-97),  American
                                General  Corporation.  Senior Vice President -
                                Life & Health Operations (1993-96), Nationwide
                                Life   Insurance   Company,  Columbus,   Ohio.
                                President (1993-96), Employers Life of Wausau,
                                Wausau, Wisconsin.  Executive Vice President -
                                Operations    (1987-93),   Wausau    Insurance
                                Companies, Wausau, Wisconsin.

Peter V. Tuters                 Senior  Vice President (since  1992) and Chief
(45)                            Investment  Officer   (since  1993),  American
                                General Corporation.

Thomas L. West Jr.              President  (since  1994)  and Chief  Executive
(60)                            Officer  (since  1997),  The Variable  Annuity
                                Life  Insurance  Company,  Houston,  Texas,  a
                                subsidiary  of  American General  Corporation.
                                Senior  Vice   President,  Annuity  Operations
                                (1991-94),  Aetna  Life  &  Casualty  Company,
                                Hartford, Connecticut.














                                                 -36-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997




Item 5.  Other Information (continued).

Election of New Director

On September 23, 1997, the company announced the election of Michael E. Murphy
to  the  company's board  of directors.   His  biographical information  is as
follows:

Michael E. Murphy               Director (since 1997),  American General  (60)
                                Corporation.   Vice Chairman (since  1993) and
                                Director   (since    1979),   Executive   Vice
                                President    and     Chief    Financial    and
                                Administrative  Officer  (1979-93),  Sara  Lee
                                Corporation,  Chicago,  Illinois.    Director,
                                Bassett  Furniture  Industries,  Incorporated;
                                GATX  Corporation;  Payless ShoeSource,  Inc.,
                                and True North Communications Inc.




































                                                 -37-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997




Item 6.  Exhibits and Reports on Form 8-K.

a.   Exhibits.

   * Exhibit  3     Amended   and   Restated   Bylaws   of   American  General
                    Corporation (As of October 23, 1997).

     Exhibit 10     Form  of  Severance  Agreement  between  American  General
                    Corporation   and  Ellen  H.  Masterson  (incorporated  by
                    reference  to Exhibit 10.10  to American  General's Annual
                    Report on Form 10-K for 1993).

   * Exhibit 11     Computation of Earnings per Share.

   * Exhibit 12     Computation of Ratio of Earnings to Fixed
                    Charges and Ratio of Earnings to Combined
                    Fixed Charges and Preferred Stock Dividends.

   * Exhibit 27     Financial Data Schedule.

                
* Filed herewith

b.   Reports on Form 8-K.

     (1)  Current Report on  Form 8-K dated August  15, 1997, with  respect to
          the filing of American  General's consolidated financial information
          for the seven months and one month ended July 31, 1997.

     (2)  Current Report on Form 8-K dated September 11, 1997, with respect to
          the  issuance  of  a  joint news  release  announcing  a  definitive
          agreement under  which American  General will acquire  the remaining
          53.8%  of the  common equivalent  shares of  Western National  for a
          total consideration  consisting of cash and  American General common
          stock valued at approximately $1.2 billion, or $29.75 per share.

     (3)  Current Report on Form 8-K dated  October 10, 1997, with respect  to
          the filing of  American General's consolidated balance sheets  as of
          December 31, 1996  and 1995, and the related consolidated statements
          of  income, shareholders'  equity, common  stock activity,  and cash
          flows, and Management's Discussion and Analysis, for the three years
          ended December  31, 1996,  restated  to include  the acquisition  of
          USLIFE under the pooling of interests method of accounting.










                                                 -38-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997




                                    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. 

AMERICAN GENERAL CORPORATION 
(Registrant)




By: PAMELA J. PENNY               
    Pamela J. Penny
    Vice President and Controller 
    (Duly Authorized Officer and 
    Chief Accounting Officer) 





Date:  November 13, 1997


























                                                 -39-
<PAGE>



                AMERICAN GENERAL CORPORATION
                          FORM 10-Q
             For the Quarter Ended September 30, 1997




                                 EXHIBIT INDEX



   Exhibit

    *  3            Amended   and   Restated   Bylaws  of   American   General
                    Corporation (As of October 23, 1997).

      10            Form  of  Severance  Agreement  between  American  General
                    Corporation  and  Ellen  H.  Masterson   (incorporated  by
                    reference to  Exhibit 10.10 to  American General's  Annual
                    Report on Form 10-K for 1993).

    * 11            Computation of Earnings per Share.

    * 12            Computation of Ratio of Earnings to Fixed
                    Charges and Ratio of Earnings to Combined
                    Fixed Charges and Preferred Stock Dividends.

    * 27            Financial Data Schedule.

























                
* Filed herewith





                                                 -40-
<PAGE>