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              June 30, 1998                  

                                      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 July 31, 1998,  there were 253,099,226 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 June 30, 1998




                              INDEX TO FORM 10-Q

                                                                              
                                                                     Page
Part I.    FINANCIAL INFORMATION.


         Item 1.  Financial Statements.

                  Consolidated Statement of Income for the six
                    months and quarters ended June 30, 1998 and 1997 .  2

                  Consolidated Balance Sheet at June 30, 1998 and       
                    December 31, 1997 ................................  3

                  Consolidated Statement of Shareholders' Equity for 
                    the six months ended June 30, 1998 and 1997 ......  4

                  Consolidated Condensed Statement of Cash Flows for
                    the six months ended June 30, 1998 and 1997 ......  5

                  Notes to Consolidated Financial Statements .........  6

         Item 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations .............. 11


Part II.   OTHER INFORMATION.


         Item 1.  Legal Proceedings .................................. 25

         Item 4.  Submission of Matters to a Vote of Security 
                  Holders ............................................ 25

         Item 5.  Other Information .................................. 26

         Item 6.  Exhibits and Reports on Form 8-K ................... 26
 











<PAGE>
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998




                        PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

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

                                      Six Months Ended      Quarter Ended
                                          June 30,             June 30,    
                                      1998        1997      1998      1997 
Revenues 
 Premiums and other considerations. $ 1,769     $ 1,633   $   891   $   832 
 Net investment income ............   2,506       1,973     1,280     1,002 
 Finance charges ..................     658         635       331       315 
 Realized investment gains ........       5          14         4        20 
 Equity in earnings of Western
  National Corporation ............       -          26         -        13 
 Other ............................      97          87        50        44 
     Total revenues ...............   5,035       4,368     2,556     2,226 

Benefits and expenses
 Insurance and annuity benefits ...   2,510       2,123     1,286     1,083 
 Operating costs and expenses .....     770         692       388       345 
 Commissions ......................     504         424        255      214 
 Change in deferred policy
  acquisition costs and cost of
  insurance purchased .............     (84)        (51)      (50)      (26)
 Provision for finance receivable
  losses ..........................     100         131        51        63 
 Interest expense 
  Corporate .......................      92          77        42        41 
  Consumer Finance ................     246         226       124       113 
 Other charges 
  Year 2000 costs .................      17           6         8         4 
  Merger-related costs ............       -         272         -       272 
  Losses on sale of non-strategic   
   assets .........................       -         113         -       113 
  Litigation settlement ...........       -          50         -        50 
     Total benefits and expenses ..   4,155       4,063     2,104     2,272 

Earnings
 Income (loss) before income tax 
  expense, minority interest, and 
  dividends on preferred 
  securities ......................     880         305       452       (46)
 Income tax expense ...............     316         180        165       56 
 Income (loss) before minority 
  interest and dividends on 
  preferred securities ............     564         125       287      (102)
 Minority interest in net income of

                                      -2-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998

  Western National Corporation ....      11           -         -         - 
 Net dividends on preferred 
  securities of subsidiaries ......      45          39        23        22 
     Net income (loss) ............ $   508     $    86   $   264   $  (124)

 Net income (loss) per share
  Basic ........................... $  2.02     $   .34   $  1.03   $  (.52)
  Diluted ......................... $  1.97     $   .34   $  1.01   $  (.52)


Item 1.  Financial Statements (continued).

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

                                                    June 30,   December 31,
                                                      1998         1997    
Assets 
 Investments 
  Fixed maturity securities (amortized cost:
    $58,216; $44,961) ...........................  $ 61,615      $47,747  
  Mortgage loans on real estate .................     3,498        3,272  
  Equity securities (cost: $96; $93) ............       114          116  
  Policy loans ..................................     2,256        2,156  
  Investment real estate ........................       232          233  
  Other long-term investments ...................       253          176  
  Short-term investments ........................     1,324          306  
      Total investments .........................    69,292       54,006  
 Assets held in Separate Accounts ...............    14,297       11,482  
 Finance receivables, net .......................     8,257        7,639  
 Deferred policy acquisition costs ..............     3,132        2,718  
 Cost of insurance purchased ....................       879          680  
 Goodwill .......................................     1,558          677  
 Other assets ...................................     3,610        2,835  
 Investment in Western National Corporation .....         -          583  
      Total assets ..............................  $101,025      $80,620  

Liabilities
 Insurance and annuity liabilities ..............  $ 60,860      $47,659  
 Liabilities related to Separate Accounts .......    14,297       11,482  
 Debt (short-term)
  Corporate ($1,552; $575) ......................     2,687        1,916  
  Consumer Finance ($3,610; $3,255) .............     7,864        7,266  
 Income tax liabilities .........................     1,626        1,380  
 Other liabilities ..............................     3,167        1,608  
      Total liabilities .........................    90,501       71,311  

Redeemable equity
 Company-obligated mandatorily redeemable
  preferred securities of subsidiaries
  holding solely company subordinated notes
    Non-convertible .............................     1,480        1,479  
    Convertible .................................       247          247  

                                      -3-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998

      Total redeemable equity ...................     1,727        1,726  

Shareholders' equity
 Convertible preferred stock (shares issued 
  and outstanding: 2,317,701) ...................        85           85  
 Common stock (shares issued: 269,298,493; 
  259,135,053; outstanding: 253,132,936; 
  243,206,215) ..................................       929          326  
 Cost of treasury stock .........................      (660)        (621) 
 Retained earnings ..............................     6,943        6,624  
 Accumulated other comprehensive income .........     1,500        1,169  
      Total shareholders' equity ................     8,797        7,583  
      Total liabilities and equity ..............  $101,025      $80,620  


Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                Consolidated Statement of Shareholders' Equity
                                  (Unaudited)
                     (In millions, except per share data)

                                                 Six Months Ended
                                                     June 30,              
                                            1998                1997       
                                                Compre-             Compre-
                                                hensive             hensive
                                      Total     Income     Total    Income 
Convertible preferred stock
 Balance at beginning and end of 
  period ...........................  $   85               $   85 

Common stock
 Balance at beginning of period ....     326                  572 
 Issuance for Western National
  Corporation acquisition ..........     580                    - 
 Valuation of stock options issued 
  for acquisition ..................      37                    - 
 Retirement of USLIFE treasury 
  shares ...........................       -                 (346)
 Issuance of treasury shares .......     (14)                  95 

 Balance at end of period ..........     929                  321 

Cost of treasury stock
 Balance at beginning of period ....    (621)                (860)
 Share repurchases .................     (78)                (363)
 Retirement of USLIFE treasury 
  shares ...........................       -                  346 
 Issuance for acquisition ..........       -                  304 
 Issuance under employee benefit  
  plans and other ..................      39                   36 

 Balance at end of period ..........    (660)                (537)


                                      -4-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998

Retained earnings
 Balance at beginning of period ....   6,624                6,420 
 Net income ........................     508    $  508         86    $   86 
 Cash dividends (per share)
  Preferred stock ($1.29; $1.29) ...      (3)                  (3)
  Common stock ($.75; $.70) ........    (186)                (159)

 Balance at end of period ..........   6,943                6,344 

Accumulated other comprehensive 
 income
  Balance at beginning of period....   1,169                  627 
  Change in net unrealized gains  
   (losses) on securities, net of 
   reclassification adjustment .....     331       331        (94)      (94)

  Balance at end of period .........   1,500                  533 

   Comprehensive income (loss) .....            $  839               $   (8)

   Total shareholders' equity ......  $8,797               $6,746 



Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                Consolidated Condensed Statement of Cash Flows
                                  (Unaudited)
                                 (In millions)

                                                        Six Months Ended
                                                            June 30,      
                                                        1998        1997  
Operating activities
       Net cash provided by operating activities ...  $ 1,059     $   929 

Investing activities 
 Investment purchases ..............................   (5,290)     (6,969)
 Investment dispositions and repayments ............    4,625       6,489 
 Finance receivable originations and purchases .....   (3,069)     (2,256)
 Finance receivable principal payments received ....    2,353       2,146 
 Disposition of non-strategic assets ...............        -         733 
 Net increase in short-term investments ............     (386)        (44)
 Acquisitions ......................................     (590)       (283)
 Other, net ........................................     (152)        (15)
       Net cash used for investing activities ......   (2,509)       (199)

Financing activities
 Retirement Services and Life Insurance
   Policyholder account deposits ...................    2,122       1,595 
   Policyholder account withdrawals ................   (2,231)     (1,472)
      Net policyholder account deposits 
       (withdrawals) ...............................     (109)        123 
   Short-term collateralized financings ............      446           - 

                                      -5-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998

       Total Retirement Services and Life Insurance.      337         123 
 Consumer Finance
   Net increase (decrease) in short-term debt ......      355        (348)
   Long-term debt issuances ........................      873         163 
   Long-term debt redemptions ......................     (632)       (711)
        Total Consumer Finance .....................      596        (896)
 Corporate
   Net increase in short-term debt .................      882         135 
   Long-term debt redemptions ......................     (354)          - 
   Dividends on common and preferred stock .........     (189)       (162)
   Common stock repurchases ........................      (74)       (365)
   Issuance of preferred securities of subsidiaries.        -         498 
   Other, net ......................................      184          50 
        Total Corporate ............................      449         156 
         Net cash provided by (used for)
          financing activities .....................    1,382        (617)

Net increase (decrease) in cash ....................      (68)        113 
Cash at beginning of period ........................      263         176 
Cash at end of period ..............................  $   195     $   289 

Supplemental disclosure of cash flow information:
 Cash paid during the period for
   Income taxes ....................................  $   143     $   188 
   Interest
    Corporate ......................................       98          67 
    Consumer Finance ...............................      240         254 
   Dividends on preferred securities of
    subsidiaries ...................................       68          59 



























                                      -6-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                  Notes to Consolidated Financial Statements
                                 June 30, 1998

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  June 30, 1998,  the consolidated results of  operations for the three
     months and six months ended June  30, 1998 and 1997, and the consolidated
     shareholders' equity  and cash flows  for the six  months ended June  30,
     1998 and 1997.

2.   New Accounting Standards.  During first quarter 1998, the company adopted
     Statement  of  Financial  Accounting  Standards  (SFAS)  130,  "Reporting
     Comprehensive  Income," which  establishes  standards for  reporting  and
     displaying  comprehensive  income and  its  components  in the  financial
     statements. American  General elected to report  comprehensive income and
     its  components in  the consolidated  statement of  shareholders' equity,
     which is included herein.   Application of this statement did not  change
     recognition or measurement of  net income and, therefore, did  not impact
     the company's consolidated results of operations or financial position.

     In June 1998, the  Financial Accounting Standards Board issued  SFAS 133,
     "Accounting for  Derivative Instruments  and  Hedging Activities,"  which
     requires all derivative  instruments to  be recognized at  fair value  as
     either  assets or liabilities in the balance  sheet.  Changes in the fair
     value of a derivative instrument are  to be reported as earnings or other
     comprehensive income, depending upon the  intended use of the  derivative
     instrument.  This statement  is effective for years beginning  after June
     15, 1999.  Adoption of SFAS 133 is not expected to have a material impact
     on  the  company's  consolidated   results  of  operations  or  financial
     position.

3.   Acquisitions.  

     Western  National.    On February  25,  1998,  the  company acquired  the
     remaining 54%  equity interest  of Western National  Corporation (Western
     National) for $1.2 billion.  The purchase price consisted of $580 million
     cash  and  10.2 million  shares of  American  General common  stock.   In
     addition, the company  issued options  to acquire 1.4  million shares  of
     American General common stock  to replace outstanding options  to acquire
     Western  National common  stock.    The  fair  value  of  these  options,
     excluding options surrendered  for $10  million cash pursuant  to a  pre-
     existing employment agreement, was $37 million.





                                      -7-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 1.  Financial Statements (continued).

     Western National's  results  of  operations  and  cash  flows  have  been
     consolidated in  the company's financial statements  effective January 1,
     1998.  Earnings  attributable to minority interests  through February 25,
     1998 have been reflected as a charge against consolidated income.  

     The  acquisition was  accounted for  using the  purchase method,  and the
     purchase price has  been allocated to Western  National's specific assets
     and  liabilities based on management's best estimate of their fair values
     at  the date  of acquisition.     Evaluation of  fair values  assigned to
     Western National's assets and liabilities (primarily related to insurance
     and annuity liabilities)  is continuing, and  allocation of the  purchase
     price  may be  adjusted when  additional information  is available.   The
     difference  between  the  aggregate  purchase price  and  the  net assets
     acquired is attributed  to goodwill that will be amortized on a straight-
     line basis over 40 years.  

     Non-cash  activities related to the acquisition that are not reflected in
     the consolidated condensed  statement of  cash flows for  the six  months
     ended June 30, 1998 were as follows:

     (In millions)

     Fair value of assets acquired                    $ 7,169 
     Liabilities assumed                               (5,962)
     Issuance of common stock                            (580)
     Fair value of stock options issued                   (37)
       Net cash paid                                  $   590 

     Western  National  is the  parent  of  Western  National  Life  Insurance
     Company, which  changed its  name to  American General  Annuity Insurance
     Company (American General Annuity) effective May 1, 1998.

     Provident.  Effective April 30, 1998, the Retirement Services division of
     the company completed  the acquisition  of substantially all  of the  in-
     force   individual   annuity  business   of  Provident   Companies,  Inc.
     (Provident)  in a  coinsurance  transaction with  a ceding  commission of
     approximately  $32  million.   The  transaction  increased insurance  and
     annuity liabilities by $2.3 billion.














                                      -8-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 1.  Financial Statements (continued).

4.   Calculation of Earnings Per Share.  The calculation of basic  and diluted
     earnings per share follows:

                                   Six Months Ended         Quarter Ended
     (In millions,                     June 30,                June 30,    
     except share data)            1998        1997        1998       1997 

     Net income (loss) ....        $508        $ 86        $264       $(124)
     Dividends on 
      convertible preferred 
      stock ...............          (3)         (3)         (2)         (2)
     Earnings available 
      to common 
      shareholders (a).....         505          83         262        (126)
     Dividends on 
      dilutive securities
       Convertible preferred 
        securities of 
        subsidiary, net of
        tax ...............           5           -           2           - 
       Convertible preferred 
        stock .............           3           -           2           - 
     Earnings available 
      to common 
      shareholders assuming
      dilution (b) ........        $513        $ 83        $266       $(126)

     Average shares 
      outstanding (a) ..... 250,380,928  240,785,292 253,464,428 241,925,669 
     Dilutive securities
       Convertible preferred 
        securities of 
        subsidiary ........   6,144,016           -   6,144,016           - 
       Convertible preferred 
        stock .............   2,317,701           -   2,317,701           - 
       Stock options ......   1,276,659   1,114,004   1,634,096           - 
     Average shares 
      outstanding assuming 
      dilution (b) ........ 260,119,304 241,899,296 263,560,241 241,925,669 

     Net income (loss) 
      per share
       Basic ..............       $2.02       $ .34       $1.03       $(.52)
       Diluted ............       $1.97       $ .34       $1.01       $(.52)

     (a) Used to compute basic earnings per share.
     (b) Used to compute diluted earnings per share.





                                      -9-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 1.  Financial Statements (continued).

5.   Investing Activities.  Cash flows related to investing activities were as
     follows:

                                                        Dispositions and
                                    Purchases              Repayments     
                                 Six Months Ended       Six Months Ended
     (In millions)                   June 30,               June 30,     
                                 1998        1997       1998        1997 
     Fixed maturity securities  $5,103      $6,728     $4,264      $5,848 
     Mortgage loans                145         198        280         433 
     Equity securities               1           2         37          65 
     Other                          41          41         44         143 
       Total                    $5,290      $6,969     $4,625      $6,489 

6.   Derivative Financial Instruments.   During the six months ended  June 30,
     1998,  the company  purchased options  to enter  into interest  rate swap
     agreements (swaptions) to limit  its exposure to reduced  spreads between
     investment  yields and  interest  crediting rates  should interest  rates
     decline  significantly over prolonged  periods.  These  swaptions, with a
     total notional amount of $1.5 billion and strike rates ranging from 4.00%
     to 5.00%, expire during 1998 and 1999.

     During the  six months  ended  June 30,  1998, the  company entered  into
     interest  rate  swap  agreements with  a  total  notional  amount of  $35
     million.   In addition, American  General Annuity had  interest rate swap
     agreements  with a total notional  amount of $120  million outstanding at
     the acquisition date,  of which $80  million is  outstanding at June  30,
     1998.  These interest rate swap agreements, which require  the receipt of
     fixed  rates and  the payment  of  floating rates,  were entered  into to
     convert  specific investment securities from  a floating rate  to a fixed
     rate basis.

     In  June 1998, the  company entered into  a treasury  rate lock agreement
     with  a notional  amount of  $190 million  to hedge  against the  risk of
     rising interest rates on  an anticipated debt issuance expected  to occur
     in 1998.

     Derivative  financial instruments did not  have a material  effect on net
     investment  income, interest expense, or net income during the six months
     ended June 30, 1998 or 1997.












                                     -10-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 1. Financial Statements (continued).

7.   Dollar Rolls.  American  General has entered into dollar  roll agreements
     as part of its strategy to increase investment yields.   Dollar rolls are
     agreements  to  sell  mortgage-backed securities  (MBSs)  and  repurchase
     substantially the  same securities at a  specified price and date  in the
     future.   The dollar rolls are accounted for as short-term collateralized
     financings  and are  included  in other  liabilities.   American  General
     Annuity had outstanding dollar  rolls of $520 million at  the acquisition
     date.    At  June  30, 1998,  the  company  had  outstanding dollar  roll
     agreements of  $976  million,  which  were collateralized  by  MBSs  with
     approximately  the equivalent fair value.  The average amount outstanding
     and the weighted average interest rate on dollar rolls for the six months
     ended June 30, 1998 were $828 million and 5.19%, respectively.

8.   Legal Contingencies.

     Market Conduct.  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
     since  1996, 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.  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 for  any adverse  determinations in  this pending
     litigation has been made in the consolidated financial statements because
     the amount of  the loss, if any, from these  actions cannot be reasonably
     estimated at this time.

     Other.   In addition to  those lawsuits or  proceedings disclosed herein,
     and  in the company's 1997  annual report on Form 10-K,  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 create the potential  for an unpredictable  judgment in any
     given suit.


                                     -11-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 1. Financial Statements (continued).

9.   Tax  Return Examinations.    American General  and  the majority  of  its
     subsidiaries file a consolidated federal income tax return.  The Internal
     Revenue Service  (IRS) has  completed examinations  of the  company's tax
     returns through  1988 and has raised  certain issues related to  1987 and
     1988 that the  company is currently contesting  in the United States  Tax
     Court.  The IRS is currently examining the company's tax returns for 1989
     through  1996.   Although  the  final  outcome  of any  issue  raised  is
     uncertain, the  company believes  that the ultimate  liability, including
     interest, will not materially 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.
This  analysis should be read  in conjunction with  the consolidated financial
statements and related notes on pages 2 through 11 of this Quarterly Report on
Form 10-Q.


                                   OVERVIEW

American General reported financial highlights as follows:

                                 Six Months Ended        Quarter Ended
(In millions,                        June 30,               June 30,     
except share data)                1998       1997        1998       1997 

Net income (loss)              $    508    $    86    $    264    $  (124)
Net income (loss) per 
 share (diluted)                   1.97        .34        1.01       (.52)
Revenues and deposits             8,876      6,890       4,450      3,487 
Assets                          101,025     77,387     101,025     77,387 
Shareholders' equity              8,797      6,746       8,797      6,746 

As discussed below, the acquisitions of Home Beneficial Life on April 16, 1997
and American General Annuity  on February 25, 1998 affected  the comparability
of the  company's year  over  year financial  results.   The  reasons for  any
significant  variations between the quarters ended June  30, 1998 and 1997 are
the same as those discussed below for the respective six month periods, unless
otherwise noted.








                                     -12-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

                              BUSINESS DIVISIONS

To  facilitate  meaningful  period-to-period  comparisons,  earnings  of  each
business division  include earnings from its business  operations and earnings
on that  amount of equity  considered necessary to  support its  business, and
exclude  non-recurring items  and  net realized  investment  gains.   Division
earnings were as follows:

                                  Six Months Ended        Quarter Ended
                                      June 30,               June 30,     
(In millions)                     1998        1997       1998        1997 

Retirement Services              $  229      $  127     $  117      $   64
Life Insurance                      323         278        165         140
Consumer Finance                     89          79         44          40
  Division earnings              $  641      $  484     $  326      $  244


                              Retirement Services

Retirement Services division results were as follows:

                                    Six Months Ended       Quarter Ended
                                        June 30,              June 30,     
(In millions)                        1998       1997       1998       1997 

Earnings                           $   229    $   127    $   117    $    64
Assets
 Investments                        38,495     22,703     38,495     22,703
 Separate Accounts                  13,168      8,902     13,168      8,902
Sales
 Tax-qualified                         786        744        395        323
 Non-qualified                       1,081         51        502         24
Deposits
 Fixed
  Tax-qualified                        735        844        363        419
  Non-qualified                      1,026          -        477          -
 Variable (mainly tax-qualified)     1,152        862        601        441
Operating expenses                     107         75         50         39

Earnings.  Division  earnings increased 81% for the six  months ended June 30,
1998  compared  to the  same  period  in  1997.   American  General  Annuity's
operations, which were included in the division's results effective January 1,
1998,  increased division earnings by  $56 million.   Earnings attributable to
minority interests  through  February  25,  1998  are  reported  in  corporate
operations.    Asset growth,  higher  investment  income  from  prepayment  of
investments, and management of fixed investment spread also contributed to the




                                     -13-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

division's  profitability.   Asset growth,  excluding $13.1  billion  and $2.3
billion related to the acquisitions of American General Annuity and Provident,
respectively,  and  the  fair  value  adjustment  related  to  the  division's
securities, was 18% from June 30, 1997 to June 30, 1998, and 11% from December
31, 1997.  This growth was due to an increase in variable deposits in  each of
the division's primary  markets, interest credited to  fixed account deposits,
and stock market appreciation on assets held in Separate Accounts.

Sales  and Deposits.  American  General Annuity, which  primarily markets non-
qualified  fixed annuities  through  financial institutions,  contributed $1.0
billion  to  sales  and total  deposits  in  the  first  six months  of  1998.
Excluding American General Annuity, 1998 year-to-date sales were 5% higher and
second quarter 1998  sales were 21% higher  than in the same periods  in 1997.
Excluding American  General Annuity, total deposits increased 10% and variable
account deposits increased 32% for the six months ended June 30, 1998 compared
to the same period in 1997, as a result of new sales and customers' preference
for  equity-based investments.  The division's  Separate Account assets, which
relate to  variable account options, increased $4.3 billion from June 30, 1997
to June 30, 1998 and $2.6 billion from December 31,  1997, reflecting variable
deposit growth and stock market appreciation.

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

                                    Six Months Ended       Quarter Ended
                                        June 30,              June 30,     
(In millions)                        1998       1997       1998       1997 

Net investment income              $1,333      $ 845      $ 687      $ 425 
Investment yield                     8.03%      7.91%      8.16%      7.89%
Average crediting rate               5.85       6.13       5.88       6.09 
Fixed investment spread              2.18       1.78       2.28       1.80 

Net investment income increased  58% in 1998 as a result of the acquisition of
American General Annuity, income  on the Provident investments acquired  as of
April  30, 1998,  growth in  invested assets,  and an  increase in  investment
yield.  Investment  yield for the six  months and quarter ended  June 30, 1998
increased  12 basis points and 27  basis points, respectively, compared to the
same periods  in 1997 due to changes in investment strategy and higher premium
income on  investments called or tendered  before their maturity  dates.  This
increase  was partially  offset  by  lower  market  rates  on  new  investment
purchases.   In response to the effect of declining market rates on investment
yield, the company adjusted the  rates credited to policyholders.  The  higher
yields  and reduced crediting rates  increased the investment  spread on fixed
accounts by  40 basis points  in the  six months  and 48 basis  points in  the
quarter ended June 30, 1998 compared to the same periods in 1997.





                                     -14-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Separate   Account   Fees.     Separate   Account   fees  include   mortality,
administrative,  and  investment advisory  fees.    These fees  increased  $28
million, or 57%,  for the first six months of 1998 compared to the same period
in 1997, due to growth in Separate Account assets.

Surrenders.   Policyholder surrenders are  influenced by both  competition and
market performance.  The  division's rate of policyholder surrenders  for tax-
qualified accounts was  5.52% of average reserves for the  first six months of
1998 (5.49% for the quarter) compared to 4.61% (4.06% for the quarter) for the
same  period in  1997.   The  policyholder  surrender rate  for  non-qualified
accounts, which relate  to American General Annuity's  fixed annuity business,
was 11.40% of  average reserves for  the first six  months and 12.28% for  the
second quarter of 1998.  The higher levels of surrenders were primarily due to
participants seeking  variable investments  to take  advantage  of the  strong
stock market in 1998.

Operating  Expenses.   Operating expenses  increased $32  million for  the six
months and $11 million  for the quarter  ended June 30,  1998 compared to  the
same  periods  of  1997 due  to  the  addition of  American  General Annuity's
operating  expenses and  the  increase in  variable  expenses to  support  the
division's  growth in deposits.   The ratio  of operating  expenses to average
assets  decreased from  .48% in  1997 to  .42% in  1998, reflecting  growth in
assets  in excess  of  growth  in  operating  expenses  and  American  General
Annuity's lower overall expense ratio.


                                Life Insurance

Life Insurance division results were as follows:

                                    Six Months Ended       Quarter Ended
                                        June 30,              June 30,     
(In millions)                        1998       1997       1998       1997 

Earnings                           $   323    $   278    $   165    $   140
Premiums and other considerations    1,551      1,490        775        760
Net investment income                1,114      1,034        566        524
Insurance and annuity benefits       1,468      1,445        737        741
Operating expenses                     369        356        182        178
Assets                              35,478     34,087     35,478     34,087
Insurance and annuity liabilities   25,323     25,332     25,323     25,332

Earnings.  Division  earnings for the  six months and  quarter ended June  30,
1998  increased 16%  and 18%, respectively,  compared to  the same  periods in
1997.  The increases were  due to the  acquisition of Home  Beneficial Life in
April  1997,  higher investment  income  from prepayment  of  investments, and
expense savings  from consolidation of recently  acquired companies, partially
offset by higher death claims and startup costs for new product initiatives.



                                     -15-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Premiums  and Deposits.  Sales  and deposits of  individual life insurance and
annuities were as follows:

                                    Six Months Ended       Quarter Ended
                                        June 30,              June 30,     
(In millions)                       1998        1997      1998        1997 

Individual life insurance
 Sales                             $  320      $  257    $  143     $   141
 Deposits                             641         565       301         284
Annuities
 Sales                                245         194       136          98
 Deposits                             287         251       152         117

Premiums and other  considerations increased 4%  for the  first six months  of
1998 compared  to the same period of 1997  primarily due to the acquisition of
Home Beneficial  Life in April  1997 and growth  in sales of group  and credit
insurance.   Individual  life insurance sales  and deposits for  the first six
months of 1998 exceeded  comparable 1997 amounts by 25% and 13%, respectively,
primarily due to the  recent entry into corporate executive  benefits markets.
Sales in these markets can  fluctuate significantly quarter to quarter due  to
large case size.

Annuity sales increased 26% and 40% for  the six months and quarter ended June
30,  1998, respectively,  compared  to the  same periods  in  the prior  year.
Annuity deposits increased  14% and  30% for  the comparable  periods.   These
increases were due to recently introduced variable annuity products, partially
offset by a decrease  in sales of  fixed annuities and structured  settlements
due to an unfavorable interest-rate environment.  

Investment  Spread.  Investment results  and interest crediting  rates were as
follows:

                                  Six Months Ended       Quarter Ended
                                      June 30,              June 30,     
                                   1998       1997       1998       1997 

Investment yield                   8.48%      8.11%      8.61%      8.15%
Average crediting rate             6.01       6.06       6.01       6.08 
Investment spread                  2.47       2.05       2.60       2.07 

Net investment  income increased 8% in 1998 compared to 1997, primarily due to
an  increase  in  premiums on  investments  called  or  tendered before  their
maturity dates and  asset growth  from the Home  Beneficial Life  acquisition.
Although market rates were lower on new investment purchases, investment yield
and spread increased due to the higher premiums on calls and tenders and lower
investment expenses.




                                     -16-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Mortality and Persistency.  Death claims and premium termination rates were as
follows:
                                 Six Months Ended        Quarter Ended
                                     June 30,               June 30,     
                                  1998       1997        1998       1997 

Death claims (in millions)      $  502     $  453      $  251     $  222 
Death claims per $1,000
 in force                       $ 3.64     $ 3.37      $ 3.64     $ 3.30 
Premium termination rate         12.23%     13.13%      11.79%     13.22%

Death claims, included in insurance and annuity benefits, increased 11% in the
first  six months of 1998 and  13% in the second quarter  compared to the same
periods of  1997 reflecting the acquisition  of Home Beneficial Life  and less
favorable  mortality experience  in  1998.    The  higher  death  claims  were
partially  offset by the reduction of  insurance reserves due to normal runoff
of older  policies.  The  lower premium termination  rate in 1998  compared to
1997  reflected lower terminations in  ancillary lines of  business.  Overall,
mortality and persistency experience was within pricing assumptions.

Operating  Expenses.  Operating expenses  increased $13 million  for the first
six months of 1998 and $4 million for the  second quarter compared to the same
periods  in 1997.  During 1998, the division achieved significant cost savings
from the ongoing consolidation  and integration of acquired companies.   These
cost savings were more than offset by startup costs to  introduce new variable
and annuity products in 1998, as  well as higher expenses to support increased
group  sales.  In addition, 1998 included Home Beneficial's operating expenses
for  six  months compared  to two  months  in 1997.   The  ratio  of operating
expenses to direct  premiums and deposits was 16.49% and  16.38% for the first
six months and second  quarter, respectively, of 1998  compared to 16.97%  and
16.76%  in the  same periods  of 1997.   The lower  ratios for  1998 reflected
smaller percentage  increases in operating expenses compared to the percentage
increases in life insurance premiums and deposits.

                               Consumer Finance

Consumer Finance division results were as follows:

                                 Six Months Ended        Quarter Ended
                                     June 30,               June 30,     
($ in millions)                   1998       1997        1998       1997 

Earnings                        $   89     $   79      $   44     $   40 
Average finance receivables      8,122      7,501       8,242      7,453 
Yield on finance receivables     16.30%     17.02%      16.13%     16.95%
Borrowing cost                    6.66       6.76        6.60       6.82 
Interest spread                   9.64      10.26        9.53      10.13 
Operating expenses              $  235     $  225      $  116     $  113 



                                     -17-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Earnings.   Division earnings increased 13% for  the six months ended June 30,
1998, compared  to the same period  of 1997, primarily due  to improved credit
quality and an increase in average finance receivables.

Finance Receivables.  Average finance receivables for the first  six months of
1998 increased  $621 million compared to the same period of 1997 and increased
$789 million for the  comparable second quarter periods.   Finance receivables
at June 30, 1998  increased $1.2 billion compared to the June 30, 1997 balance
and $610 million compared to  the December 31, 1997 balance.   These increases
were  due to higher loan production and  bulk purchases of real estate secured
loans,  which reflect  the  company's program  to  improve credit  quality  by
increasing the  proportion of real  estate secured loans.   The increase  from
June  30, 1997  was also  attributable  to growth  in  retail sales  contracts
resulting from the introduction of new marketing programs. 

Credit Quality.  

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

                                 Six Months Ended        Quarter Ended
                                     June 30,               June 30,     
($ in millions)                   1998       1997        1998       1997 

Charge offs                     $  108     $  141      $   54     $   68 
  Annualized % of average
   finance receivables            2.66%      3.76%       2.62%      3.68%

                                     June 30,             December 31,
                                  1998       1997             1997    

Allowance for finance
 receivable losses              $  365     $  385             $  373     
  % of finance receivables        4.24%      5.20%              4.65%    

Delinquencies                   $  317     $  300             $  310     
  % of finance receivables        3.43%      3.73%              3.60%    

The  decreases in  the charge  off  and delinquency  ratios compared  to prior
periods  reflect   the  positive  impact  of  the   company's  credit  quality
improvement  program, which  included an  increase in  the proportion  of real
estate secured loans  and higher underwriting standards.  The  decrease in the
allowance reflects the improvement  in charge-off experience, partially offset
by an increase in the allowance to support the growth in receivables.







                                     -18-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Interest  Spread.    The interest  spread  between  yield  and borrowing  cost
decreased 62 basis  points for the six months of 1998  and 60 basis points for
the second quarter of 1998, compared to the same periods in 1997.  The decline
in spread reflected lower yields from the  increased proportion of real estate
secured loans, which generally have a higher level of credit quality and lower
yields,   and  lower  yields  on  retail  sales  contracts  due  to  increased
competition, partially offset by lower borrowing cost.

Operating Expenses.   Operating expenses  as a percentage  of average  finance
receivables decreased to 5.80% for the first six months of 1998 from 5.98% for
the same  period of 1997,  and to 5.73% from  5.99% for the  comparable second
quarter periods, due  to the  increase in average  finance receivables,  which
more than offset the increase in operating expenses.


                                  INVESTMENTS

Invested assets consist primarily of fixed maturity securities, mortgage loans
on real estate, and policy loans.

Fair  Value  of  Securities.   A  decrease  in  interest  rates  and resulting
increases in bond values in second quarter 1998 caused a $555 million increase
in the fair  value adjustment to fixed maturity securities  and a related $335
million positive  adjustment to shareholders'  equity from December  31, 1997.
The  components  of  the  adjustment  to  report  fixed  maturity  and  equity
securities at fair value at June 30, 1998 and December 31,  1997, and the 1998
change, were as follows:

                                    June 30,    December 31,
(In millions)                         1998          1997        Change 

Fair value adjustment to fixed 
 maturity securities                 $3,399       $ 2,844      $   555 
Decrease in deferred policy
 acquisition costs and cost of
 insurance purchased                 (1,097)       (1,062)         (35)
Increase in deferred income taxes      (813)         (628)        (185)
Net unrealized gains
 Fixed maturity securities            1,489         1,154          335 
 Equity securities                       11            15           (4)
   Net unrealized gains on
     securities                      $1,500       $ 1,169      $   331 









                                     -19-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Fixed  Maturity Securities.    At June  30,  1998, fixed  maturity  securities
included $45.9  billion of corporate  bonds, $13.4 billion  of mortgage-backed
securities, and  $2.2 billion of bonds  issued by governmental agencies.   The
average credit rating of the fixed maturity securities was A+ at June 30, 1998
and December  31, 1997.  Average  credit ratings by category at  June 30, 1998
were as follows:

                                    June 30,                Average Credit
(In millions)                        1998           %           Rating    

Investment grade                    $44,793         72%          A   
Mortgage-backed                      13,429         22           AAA 
Below investment grade                3,393          6           BB- 
 Total fixed maturity 
  securities                        $61,615        100%          A+  

Below Investment Grade.  Below investment grade securities have credit ratings
below BBB-.  Below investment  grade securities were 5% of invested  assets at
June  30, 1998  and 4% at  December 31,  1997.   The company invests  in below
investment grade securities  to enhance  the overall yield  of the  portfolio.
Investment  income from below investment grade securities was $148 million for
the  six months ended  June 30, 1998  and $85  million for the  same period in
1997.  Realized investment gains (losses) were immaterial.

Non-Performing.   Bonds are deemed  to be  non-performing when the  payment of
interest is sufficiently uncertain  as to preclude accrual of interest.   Non-
performing bonds  were less than  0.1% of total  fixed maturity  securities at
June 30, 1998 and December 31, 1997.

Mortgage Loans.  Mortgage  loans on real estate, consisting primarily of loans
on office and retail properties, represented 5% of invested assets at June 30,
1998 and 6% at  December 31, 1997.  Mortgage loan statistics  at June 30, 1998
and December 31, 1997 were as follows:

                                             June 30,   December 31,
     (In millions)                             1998         1997    

     Mortgage loans                           $ 3,544      $ 3,326 
     Allowance for losses                         (46)         (54)
       Mortgage loans, net                    $ 3,498      $ 3,272 

     Allowance for losses                        1.3%         1.6% 
     Delinquent loans (60+ days)              $   43       $    20 
       % of mortgage loans                       1.2%           .6%
     Restructured loans                       $   99       $   115 
       % of mortgage loans                       2.8%          3.5%
     Yield on restructured loans                 7.9%          8.6%




                                     -20-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Watch  List.  At  June 30, 1998,  $106 million  of mortgage loans  were on the
company's watch  list, compared  to $128  million at December  31, 1997.   The
decrease was  due to  loans that  were no  longer undercollateralized  or were
reinstated,  refinanced,  or  repaid.   While  the  watch  list  loans may  be
predictive  of  future delinquent  loans, the  company  does not  anticipate a
significant effect on operations, liquidity, or capital from these loans.


                               CAPITAL RESOURCES

Corporate Capital.   American General's  target capital structure  consists of
25% corporate debt, 15%  redeemable equity, and 60% shareholders'  equity.  At
June  30, 1998, corporate capital  totaling $11.7 billion,  excluding the fair
value  adjustment on  securities,  consisted of  $2.7  billion corporate  debt
(23%), $1.7  billion redeemable equity  (15%), and $7.3  billion shareholders'
equity (62%).

On February  25, 1998, American General  issued 10.2 million  shares of common
stock  and paid $580 million cash to  complete the $1.2 billion acquisition of
Western National.  The cash portion of the purchase price was financed through
short-term  borrowings.  Additionally,  the company issued  options to acquire
1.4 million  shares of American General common  stock with an average exercise
price of $24.75  to replace  outstanding options to  acquire Western  National
common stock.   The fair value of these options, excluding options surrendered
for $10 million cash pursuant to  a pre-existing employment agreement, was $37
million.   In  connection with  the acquisition,  the company  assumed Western
National's long-term debt of $148 million.

The ratings assigned by rating agencies  serve as an indicator of an insurance
company's financial strength  and ability  to meet its  future obligations  to
policyholders.  During second quarter 1998,  A.M. Best adjusted its ratings of
American  General's principal  insurance companies  to A+, its  second highest
rating.  In August 1998, Moody's assigned an initial rating of Aa3 to American
General Life and Accident.  As of August 10, 1998,  financial strength ratings
were as follows:

                                     A.M.     Standard    Duff &
                                     Best     & Poor's    Phelps     Moody's

American General Annuity              A+         AA-        AAA        Aa3  
All American Life                     A+         AA+                   Aa3  
American General Life                 A+         AA+        AAA        Aa3  
American General Life & Accident      A+         AA+        AAA        Aa3  
Franklin Life                         A+         AA+        AAA        Aa3  
Old Line Life                         A+         AA+                   Aa3  
United States Life                    A+         AA+                   Aa3  
VALIC                                 A+         AA+        AAA        Aa2  




                                     -21-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Consumer Finance.   The  Consumer Finance  division's capital varies  directly
with the  amount of total  finance receivables.   The capital mix  of consumer
finance debt  and equity  is based  primarily upon  maintaining leverage  at a
level that supports cost-effective funding.

Consumer finance  capital  of $9.2  billion  at June  30,  1998 included  $7.9
billion  of consumer  finance debt,  which was  not  guaranteed by  the parent
company,  and $1.3 billion of equity.   The Consumer Finance division's target
ratio of debt to tangible net  worth, a standard measure of financial  risk in
the consumer finance industry, is 7.5 to  1.  The ratio equaled the target  at
June 30, 1998 and December 31, 1997.


                                   LIQUIDITY

The  company's overall  liquidity  is based  on cash  flows from  the business
divisions  and its  ability to  borrow  in both  the long-term  and short-term
markets at competitive rates.  At June 30, 1998, the company had committed and
unused  credit facilities  of $4.8  billion.   The company  believes  that its
overall sources  of liquidity will  continue to  be sufficient to  satisfy its
foreseeable financial obligations.

Parent Company.  The parent company received $536 million of dividends, net of
capital  contributions, from subsidiaries during the six months ended June 30,
1998 compared to $26  million (excluding dividends paid to  USLIFE Corporation
prior to its  acquisition by the  company) for the same  period in 1997.   Net
dividends  were low in 1997 because  the company was re-evaluating the capital
requirements  for  its   business  divisions.    While  the  subsidiaries  are
restricted in  the amount  of dividends  they may pay  to the  parent company,
these  restrictions are not expected  to affect American  General's ability to
meet  its cash  obligations.   In 1998,  the company  repurchased 1.2  million
shares of its common  stock for a total cost of $78  million, of which 700,000
shares at a cost of $47 million were purchased in the second quarter.

Retirement Services and  Life Insurance.  Principal sources (uses) of cash for
the Retirement Services and Life Insurance divisions were as follows:

                                                  Six Months Ended 
                                                      June 30,      
(In millions)                                     1998        1997  

Operating activities                             $1,028      $1,040  
Fixed policyholder account deposits, 
 net of withdrawals                                (109)        123  
Variable account deposits, net of 
 withdrawals                                      1,366         952  
Short-term collateralized financings                446           -  




                                     -22-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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

Operating  cash flows for the Retirement Services and Life Insurance divisions
in the first six months of 1998 approximated the amounts in the same period of
1997.   The  decrease  in  net fixed  policyholder  account  deposits and  the
increase in net  variable account  deposits in 1998  related to  policyholders
seeking higher  returns in  equity-based investments, including  the company's
Separate  Accounts.   Because the  investment risk  on variable  accounts lies
solely with the  policyholder, deposits  and withdrawals  related to  Separate
Accounts are not included in the company's consolidated condensed statement of
cash  flows.    The  company  had adequate  cash  liquidity  to  fund  the net
withdrawals  of fixed  account deposits  in 1998.    Short-term collateralized
financings relate to dollar roll agreements entered into in 1998.

Major  uses of cash were the net  purchase of investments necessary to support
increases in insurance and annuity liabilities,  and net dividends paid to the
parent.  The  subsidiaries in these divisions  paid dividends, net of  capital
contributions, of  $367 million  in  the first  six months  of  1998 and  $103
million for the same period of 1997.  The 1998 net dividends also reflect $188
million  of capital contributions made  by an intermediate  holding company to
the  Retirement  Services  division in  second  quarter  1998  to support  the
Provident acquisition.

Consumer Finance.   Principal sources (uses) of  cash for the Consumer Finance
division were as follows:

                                                  Six Months Ended 
                                                      June 30,      
(In millions)                                     1998        1997  

Operating activities                              $ 259       $ 283  
Increase (decrease) in borrowings                   596        (896) 

Cash  provided by operating  activities decreased in  the first  six months of
1998  since 1997 included operations  related to non-strategic  assets sold in
second quarter 1997.  Cash provided by borrowings increased in  the six months
ended June  30, 1998  compared to the  same period  in 1997  due to growth  in
receivables.

Other major  uses of cash were  to fund finance receivables  and net dividends
paid  to the parent company.   Net cash  used to fund  finance receivables was
$716 million for the six months ended June 30, 1998, up  from $110 million for
the same period in 1997.  Net dividends paid to the parent company totaled $18
million in  the first six months of 1998 compared  to $66 million for the same
period in 1997.








                                     -23-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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


                                   YEAR 2000

American  General has  numerous  technology systems  which  are managed  on  a
decentralized  basis.   The company's  Year 2000  readiness efforts  are being
undertaken  by  its  key business  units  with  centralized  oversight.   Each
business unit has developed and is implementing a plan to minimize the risk of
a significant negative impact on its operations.

While the  specifics  of the  plans  vary,  the plans  include  the  following
activities: (1) perform  an inventory of the  company's information technology
and  non-information  technology  systems;  (2)  assess  which  items  in  the
inventory may expose  the company to business  interruptions due to  Year 2000
issues; (3)  test systems for  Year 2000  readiness; (4) reprogram  or replace
systems  that  are not  Year  2000  ready;  and  (5)  return  the  systems  to
operations.  The company  expects to substantially complete the  foregoing for
significant systems by December 31, 1998.  However, activities (3) through (5)
for certain systems will continue in 1999.

In addition, the  company has  relationships with various  third parties  that
must also be Year 2000 ready.  Therefore, the plans also assess and attempt to
mitigate the  risks associated with the potential  failure of third parties to
achieve Year 2000 readiness.  Due to the various stages of third parties' Year
2000 readiness, these activities will extend through 1999.

Through  June  30, 1998,  the company  has incurred  and expensed  $33 million
(pretax) related to Year 2000 readiness, including $17 million incurred during
the first six months of 1998.  The company currently anticipates that it  will
incur future costs of approximately $30 to $40 million (pretax) for additional
internal staff, third-party vendors,  and other expenses to achieve  Year 2000
readiness.   In addition, the  company has  elected to accelerate  the planned
replacement of certain systems  as part of its Year 2000 plans.   Costs of the
replacement systems will be capitalized and amortized over their useful lives,
in accordance with the company's normal accounting policies.

Due to the  magnitude and complexity of this project,  risks and uncertainties
exist.  If  conversion of the company's  systems is not completed  on a timely
basis  (due to  non-performance by  significant third-party  vendors, lack  of
qualified  personnel  to  perform the  Year  2000  work,  or other  unforeseen
circumstances in  completing the  company's  plans), or  if significant  third
parties fail to  achieve Year 2000 readiness on a timely  basis, the Year 2000
issue could have a material adverse impact on the operations of the company.









                                     -24-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



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


                          FORWARD-LOOKING STATEMENTS

All statements, trend analyses, and other information contained in this report
and elsewhere  (such as other filings  by the company with  the Securities and
Exchange  Commission,  press  releases,  presentations by  management  of  the
company,  or oral statements) relative  to markets for  the company's products
and trends in the company's operations  or financial results, as well as other
statements   including  words   such  as   "anticipate,"  "believe,"   "plan,"
"estimate,"  "expect," "intend,"  and  other similar  expressions,  constitute
forward-looking statements under the  Private Securities Litigation Reform Act
of 1995. Forward-looking statements are  made based upon management's  current
expectations and  beliefs concerning  future developments and  their potential
effects upon the  company. There can be no assurance  that future developments
affecting  the company will be those anticipated by management. 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: (1) changes in general economic conditions,
including  the  performance  of  financial markets  and  interest  rates;  (2)
customer  responsiveness to both  new products and  distribution channels; (3)
competitive, regulatory, or tax changes that affect the cost of  or demand for
the  company's  products;  (4) the  company's  ability  to  achieve Year  2000
readiness  for significant  systems  and operations  on  a timely  basis;  (5)
adverse  litigation  results or  resolution  of  litigation, including  market
conduct  litigation; and  (6)  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 other  documents filed
by  the company  with  the Securities  and  Exchange Commission.  The  company
undertakes no obligation to update or revise any forward-looking  information,
whether as a result of new information, future developments, or otherwise.



















                                     -25-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



                          PART II.  OTHER INFORMATION

Item 1. Legal Proceedings.

Reference  is  made  to Note  8  to  the  Registrant's Unaudited  Consolidated
Financial Statements  in  Part I  of  this Form  10-Q  for the  quarter  ended
June 30, 1998.

Item 4.  Submission of Matters to a Vote of Security Holders.

Annual Meeting.

On April 30, 1998, American  General held its annual meeting of  shareholders.
As of that  date, shareholders of  the company's common  and preferred  shares
outstanding were entitled to 255,594,219 votes.  At the meeting, the company's
shareholders voted on the  following matters: 1) election of  twelve directors
constituting the company's entire board, for one-year terms; 2) approval of an
amendment to the Restated  Articles of Incorporation increasing the  number of
shares  of  common   stock  authorized  for   issuance  from  300,000,000   to
800,000,000;   3)  approval  of  an  Employee  Stock  Purchase  Plan;  and  4)
ratification of the appointment of  Ernst & Young LLP as  independent auditors
for 1998.  Each matter was approved by the shareholders.   The votes cast for,
against, and abstentions as to each such matter were as follows:

                                Votes For    Votes Against     Abstentions

ELECTIONS OF DIRECTORS:

J. Evans Attwell               225,804,723     2,598,311            -   
Brady F. Carruth               226,280,858     2,122,176            -   
James S. D'Agostino Jr.        226,618,920     1,784,114            -   
W. Lipscomb Davis Jr.          226,553,624     1,849,410            -   
Robert M. Devlin               226,579,535     1,823,499            -   
Larry D. Horner                226,600,890     1,802,144            -   
Richard J. V. Johnson          226,562,343     1,840,691            -   
Michael E. Murphy              226,583,331     1,819,703            -   
Jon P. Newton                  226,607,939     1,795,095            -   
Michael J. Poulos              226,562,933     1,840,101            -   
Robert E. Smittcamp            226,622,693     1,780,341            -   
Anne M. Tatlock                226,610,670     1,792,364            -   

AMENDMENT TO RESTATED 
ARTICLES OF INCORPORATION:     206,915,976    20,961,989         525,069

APPROVAL OF THE EMPLOYEE
STOCK PURCHASE PLAN:           222,266,724     3,343,323       2,792,987

INDEPENDENT AUDITORS:          227,704,960       313,304         384,770

A more  detailed description of  the matters voted  on by shareholders  of the
company at this  meeting is included in  the definitive Proxy Statement  dated
March 17, 1998 and incorporated herein by reference.


                                     -26-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



Item 5.  Other Information.

The company's  bylaws  provide  generally  that  nominations  of  persons  for
election to  the board of  directors and shareholder  proposals for an  annual
meeting may be made by a shareholder only if the shareholder is a  shareholder
of  record  and  such   shareholder  gives  timely  written  notice   of  such
shareholder's  intent to  make such nomination  or nominations  or shareholder
proposals  to the  corporate secretary.   In  the case  of the  company's 1999
annual  meeting, to  be timely,  notice of  shareholder proposals  or director
nominations must be given to the corporate secretary by December 31, 1998, but
no  earlier than December  1, 1998; in  the event  the 1999 annual  meeting is
called for a date that is not within  30 days before or after April 30,  1999,
notice by the shareholder in order to  be timely must be given not later  than
the close of  business on the tenth  day following the day on  which notice of
the date of such annual meeting is mailed or public disclosure  of the date of
such annual meeting is made, whichever first occurs.

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

a.   Exhibits.

     Exhibit 10.1   1984 Stock and Incentive Plan (As Amended and Restated)

     Exhibit 10.2   1994 Stock and Incentive Plan (As Amended and Restated)

                    In  the  Annual Report  on Form  10-K  for the  year ended
                    December  31, 1997,  this plan  was referred  to as  "1984
                    Stock  and   Incentive  Plan  (As  Amended   and  Restated
                    Effective as of February 8, 1994)".

     Exhibit 10.3   1997 Stock and Incentive Plan (As Amended and Restated)

     Exhibit 11     Computation of Earnings per Share  (included in Note 4  of
                    Notes to Financial Statements)

     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

b.   Reports on Form 8-K.

     None.










                                     -27-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998



                                    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, on August 12, 1998.

AMERICAN GENERAL CORPORATION 
(Registrant)




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

































                                     -28-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended June 30, 1998


                                 EXHIBIT INDEX


   Exhibit


     10.1           1984 Stock and Incentive Plan (As Amended and Restated)

     10.2           1994 Stock and Incentive Plan (As Amended and Restated)

                    In  the  Annual Report  on Form  10-K  for the  year ended
                    December  31, 1997,  this  plan was  referred to  as "1984
                    Stock  and   Incentive  Plan  (As  Amended   and  Restated
                    Effective as of February 8, 1994)".

     10.3           1997 Stock and Incentive Plan (As Amended and Restated)

     11             Computation of Earnings per  Share (included in Note 4  of
                    Notes to Financial Statements)

     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






























                                     -29-
<PAGE>