AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 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              March 31, 1997                  

                                      OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                       SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to _____________________

                         Commission file number 1-7981


                        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 April 30, 1997, there were 203,601,402 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 March 31, 1997




                              INDEX TO FORM 10-Q

                                                                              
                                                                     Page
Part I.    FINANCIAL INFORMATION.


         Item 1.  Financial Statements.

                  Consolidated Statement of Income for the three
                    months ended March 31, 1997 and 1996 .............  2

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

                  Consolidated Condensed Statement of Cash Flows for
                    the three months ended March 31, 1997 and 1996 ...  4

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

         Item 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations ..............  9


Part II.   OTHER INFORMATION.


         Item 1.  Legal Proceedings .................................. 24

         Item 6.  Exhibits and Reports on Form 8-K ................... 24
 











<PAGE>










                                      -1-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997




                        PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

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

                                                        Three Months Ended
                                                            March 31,       
                                                        1997          1996  
Revenues 
 Premiums and other considerations ................   $   487       $   480 
 Net investment income ............................       846           800 
 Finance charges ..................................       320           371 
 Realized investment gains (losses) ...............        (7)           27 
 Equity in earnings of Western National Corporation        13             8 
 Other ............................................        33            25 
     Total revenues ............................... .     1,692       1,711 

Benefits and expenses
 Insurance and annuity benefits ...................       762           774 
 Policyholder dividends ...........................        23            23 
 Operating costs and expenses .....................       274           264 
 Commissions ......................................       136           125 
 Change in deferred policy acquisition costs and
  cost of insurance purchased .....................       (19)          (16)
 Provision for finance receivable losses ..........         68          109 
 Interest expense
  Corporate .......................................        27            30 
  Consumer Finance ................................       113           126 
     Total benefits and expenses ..................     1,384         1,435 

Earnings
 Income before income tax expense .................       308           276 
 Income tax expense ...............................       109            97 
 Income before net dividends on preferred 
  securities of subsidiaries.......................       199           179 
 Net dividends on preferred securities of
  subsidiaries ....................................        17            10 
     Net income ...................................   $   182       $   169 

 Net income per share .............................   $   .88       $   .81 

 Dividends paid per common share ..................   $   .35       $  .325 

 Average fully diluted shares outstanding
  (in thousands) ..................................   210,709       212,653 




                                      -2-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997




Item 1.  Financial Statements (continued).

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

                                                   March 31,   December 31,
                                                     1997          1996    
Assets 
 Investments 
  Fixed maturity securities (amortized cost:
    $37,833; $37,194) ...........................   $38,138      $38,490  
  Mortgage loans on real estate .................     2,944        2,970  
  Equity securities (cost: $95; $107) ...........       116          133  
  Policy loans ..................................     1,744        1,728  
  Investment real estate ........................       591          598  
  Other long-term investments ...................       207          191  
  Short-term investments ........................       405          160  
      Total investments .........................    44,145       44,270  
 Cash ...........................................       164          149  
 Finance receivables, net .......................     7,064        7,230  
 Investment in Western National Corporation .....       506          535  
 Deferred policy acquisition costs ..............     2,542        2,169  
 Cost of insurance purchased ....................       796          755  
 Acquisition-related goodwill ...................       550          557  
 Assets held for sale ...........................       634          667  
 Other assets ...................................     2,109        2,059  
 Assets held in Separate Accounts ...............     8,157        7,863  
      Total assets ..............................   $66,667      $66,254  

Liabilities
 Insurance and annuity liabilities ..............   $40,614      $40,232  
 Debt (short-term)
  Corporate ($393; $362) ........................     1,565        1,533  
  Consumer Finance ($3,037; $3,131) .............     7,330        7,630  
 Income tax liabilities .........................       815        1,020  
 Other liabilities ..............................     1,263        1,128  
 Liabilities related to Separate Accounts .......     8,157        7,863  
      Total liabilities .........................    59,744       59,406  

Redeemable equity
 Company-obligated mandatorily redeemable
  preferred securities of subsidiaries
  holding solely company subordinated notes
    Non-convertible .............................     1,479          982  
    Convertible .................................       246          245  
      Total redeemable equity....................     1,725        1,227  

Shareholders' equity
 Convertible preferred stock
  (shares issued and outstanding: 2,317,701).....        85           85  

                                      -3-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

 Common stock (shares issued: 220,122,120;
  outstanding: 200,478,385; 203,090,677).........       395          398  
 Net unrealized gains on securities .............       142          559  
 Retained earnings ..............................     5,203        5,093  
 Cost of treasury stock .........................      (627)        (514) 
      Total shareholders' equity ................     5,198        5,621  
      Total liabilities and equity ..............   $66,667      $66,254  





Item 1.  Financial Statements (continued).

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

                                                       Three Months Ended
                                                           March 31,      
                                                        1997        1996  

Operating activities
       Net cash provided by operating activities ...  $   629     $   657 

Investing activities 
 Investment purchases ..............................   (3,623)     (2,040)
 Investment dispositions and repayments ............    3,068       1,589 
 Finance receivable originations and purchases .....   (1,017)     (1,010)
 Finance receivable principal payments received ....    1,082       1,270 
 Net (increase) decrease in short-term investments .     (245)         13 
 Acquisition of Independent Life ...................        -        (106)
 Other, net ........................................        5         (64)
       Net cash used for investing activities ......     (730)       (348)

Financing activities
 Retirement Services and Life Insurance
   Policyholder account deposits ...................      708         677 
   Policyholder account withdrawals ................     (616)       (590)
      Total Retirement Services and Life Insurance..       92          87 
 Consumer Finance
   Net decrease in short-term debt .................      (94)       (268)
   Long-term debt issuances ........................        2          30 
   Long-term debt redemptions ......................     (208)       (151)
      Total Consumer Finance .......................     (300)       (389)
 Corporate
   Net increase in short-term debt .................       31         104 
   Issuance of preferred securities of subsidiaries.      498           - 
   Dividends on common and preferred stock .........      (72)        (66)
   Common stock repurchases ........................     (123)        (22)
   Other, net ......................................      (10)          4 
      Total Corporate ..............................      324          20 
       Net cash provided by (used for)
        financing activities .......................      116        (282)

                                      -4-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

Net increase in cash ...............................       15          27 
Cash at beginning of period ........................      149         161 
Cash at end of period ..............................  $   164     $   188 

Supplemental disclosure of cash flow information:
 Cash paid (received) during the period for
   Income taxes ....................................  $   (13)    $   (49)
   Interest
    Corporate ......................................       16          32 
    Consumer Finance ...............................      130         121 
   Dividends on preferred securities of
    subsidiaries ...................................       14          14 





Item 1.  Financial Statements (continued).

                         AMERICAN GENERAL CORPORATION
                  Notes to Consolidated Financial Statements
                                March 31, 1997

1.   Accounting  Policies. The  accompanying unaudited  consolidated financial
     statements  of American  General Corporation  (American General)  and its
     subsidiaries (collectively, 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,
     consisting  only of normal recurring  accruals, that are  necessary for a
     fair  presentation of  the company's  consolidated financial  position at
     March 31, 1997, and the consolidated results of operations and cash flows
     for the three months ended March 31, 1997 and 1996.

     To conform  with the 1997 presentation, certain items in the prior period
     have been reclassified.

2.   New Accounting  Standard.   In February  1997,  the Financial  Accounting
     Standards Board 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.   Retroactive restatement for  all
     periods  presented will be required  upon adoption.   Application of this
     statement will change disclosures  related to earnings per share,  but is
     not expected to have a material impact on reported per share amounts.

3.   Derivative  Financial  Instruments.    Derivative  financial  instruments
     related  to investment securities  did not have a  material effect on net
     investment income  during the three months ended  March 31, 1997 or 1996.
     Derivative  financial instruments related to debt securities did not have
     a  material effect  on the  weighted-average borrowing  rate  or reported
     interest expense during the three months ended March 31, 1997 or 1996.

4.   Assets Held for Sale.  During fourth quarter 1996, the company decided to
     offer for sale $875 million of non-strategic, underperforming credit card

                                      -5-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

     and private label finance  receivable portfolios.  These assets  held for
     sale  are carried  at  net realizable  value,  after considering  related
     expenses.  The decrease in assets held for sale during first quarter 1997
     was  due to the  net activity of  the associated  finance receivables and
     their related results of operations.

     In April 1997,  the company repurchased $100 million of private label and
     credit   card  receivables   that  previously   had  been   sold  through
     securitization.  No gain or loss resulted from this transaction.  These  








Item 1.  Financial Statements (continued).

     repurchased credit card receivables  will be offered for sale  along with
     the  company's other  credit  card receivables,  increasing the  carrying
     amount of  assets held  for sale by  approximately $70  million in  April
     1997.

5.   Company-Obligated   Mandatorily   Redeemable   Preferred  Securities   of
     Subsidiary (Preferred Securities).  On  March 14, 1997, American  General
     Institutional Capital  B, a subsidiary trust of  American General, issued
     500,000 shares, or $500 million, of non-convertible preferred securities.
     The non-convertible  preferred 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.

6.   Subsequent Events.

     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 (43%) and 9.5
     million shares of American  General common stock (57%).   The acquisition
     will be accounted for using the purchase method. 

     Share  Repurchase.   On April  15, 1997,  American General  purchased 6.4
     million  shares of  its  common stock  in  an accelerated  share  buyback

                                      -6-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

     transaction.   The shares were purchased from an investment bank for $234
     million based  upon 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 will  purchase replacement shares in the  open market.  This buyback,
     combined with 3.0  million shares repurchased  since the announcement  of
     the  definitive agreement to acquire Home Beneficial Life, has the effect
     of  repurchasing substantially  all  of the  shares  issued in  the  Home
     Beneficial Life acquisition.









Item 1.  Financial Statements (continued).

7.   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.  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.  The company  intends to continue to
     vigorously  contest the matter  through the appellate  process.  Although
     substantial  risks and uncertainties remain  with respect to the ultimate
     outcome, legal  counsel has advised the  company that it  is not probable
     within  the meaning of SFAS  5, "Accounting for  Contingencies," that the
     company  will ultimately  incur a material  liability in  connection with
     this matter.  Accordingly, no provision has been made in the consolidated
     financial statements related to this contingency.  Based upon information
     presently available, the company believes that the total amount that will
     ultimately be  paid, if any,  arising from this  lawsuit will not  have a
     material  adverse  effect  on   the  company's  consolidated  results  of
     operations and financial position.

     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.  On June 30,  1993, a
     representative  suit for refund was  filed in the  United States Court of
     Federal  Claims.  On  February 7, 1996,  the court ruled  in favor of the
     company on all  legal issues related to this contingency,  and a judgment
     was entered in favor of  the company on July 9, 1996, for  the portion of
     the contingency related to  the representative case.  The  government has
     appealed this judgment;  however, the  company intends to  pursue a  full

                                      -7-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

     refund of the  amounts paid.  Accordingly, no provision  has been made in
     the consolidated financial statements related to this contingency.

     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











Item 1.  Financial Statements (continued).

     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.

     Certain  of American  General's subsidiaries  are defendants  in lawsuits
     filed  as  purported class  actions  asserting  claims  related to  sales
     practices of certain life insurance products.  Because these cases are in
     the  early stages  of  litigation,  it  is  premature  to  address  their
     materiality.     The  claims   are  being  defended   vigorously  by  the
     subsidiaries.

8.   Status of Federal 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.    One  issue  from  prior tax  returns  has  been  the  subject of
     litigation, as described in Note 7.

9.   Ratio of  Earnings to  Fixed Charges and  Ratio of  Earnings to  Combined
     Fixed Charges  and Preferred Stock Dividends.   The ratio  of earnings to
     fixed charges and  the ratio  of earnings to  combined fixed charges  and
     preferred stock dividends were as follows:

                                                    Three Months Ended
                                                        March 31,     
                                                     1997        1996 
     Ratio of Earnings to Fixed
      Charges:
       Consolidated operations ....................   2.90        2.65     
       Consolidated operations, 

                                      -8-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

        corporate fixed charges only ..............  10.18        8.40     
       American General Finance, Inc. .............    1.48       1.34     

     Ratio of Earnings to Combined
      Fixed Charges and Preferred
      Stock Dividends:
       Consolidated operations ....................   2.47        2.44     
       Consolidated operations, 
        corporate fixed charges and 
        preferred stock dividends only ............    5.51       6.01     










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 1996
Annual Report to Shareholders,  including Management's Discussion and Analysis
on pages 16 through 25 thereof.

This  analysis should be read  in conjunction with  the consolidated financial
statements and related notes on pages 2 through  8 of this Quarterly Report on
Form 10-Q.


                             CORPORATE DEVELOPMENT

On  February 13, 1997, American General announced a definitive agreement under
which  USLIFE Corporation  (USLIFE)  will merge  into  American General  in  a
transaction  valued at $1.8 billion.  Under the agreement, USLIFE shareholders
will exchange  each share of USLIFE  common stock for American  General common
stock valued at  $49.  The exchange ratio will be  based on an average trading
price of American General common stock  prior to closing, subject to a minimum
of  1.0919 shares and  a maximum of  1.2937 shares of  American General common
stock.

The transaction, which  is subject to approval by American  General and USLIFE
shareholders  and to requisite regulatory  approvals, is expected  to close by
June  30,  1997.   The  merger  will be  accounted  for using  the  pooling of
interests method.

To  complete the  merger  with  USLIFE,  American  General  expects  to  issue
approximately 39 million to 47 million shares  of common stock.  Additionally,
the company  will assume USLIFE's  debt of approximately  $600 million.   Non-
recurring costs of approximately $170 million ($167 million aftertax) directly

                                      -9-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

attributable  to the  merger, including change  in control costs  and fees for
investment  bankers, accountants, and attorneys, will be charged to expense in
second quarter 1997.


                      CONSOLIDATED RESULTS OF OPERATIONS

                                                Three Months Ended
          (In millions,                             March 31,     
          except share data)                     1997        1996 

          Net income                            $ 182       $ 169
          Net income per share                    .88         .81








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

Net income for the three months ended March 31, 1997 increased 7%  compared to
the same  period in the prior year.  This  increase was due to higher earnings
in the  Consumer Finance segment, inclusion of  three months of operations for
Independent Life (acquired February  29, 1996) in the Life  Insurance segment,
and growth in the Retirement Services segment.

Net income per  share for the three  months ended March 31, 1997  increased 9%
compared  to the same  period of 1996.   Net income  per share increased  to a
greater degree than  net income, primarily  due to the  effect of 7.2  million
shares  of common stock repurchased  during the last  twelve months, partially
offset by  3.7  million shares  of  common stock  and  2.3 million  shares  of
convertible preferred  stock, issued for the acquisition  of Independent Life,
being outstanding only one month in first quarter 1996.


                               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.

Segment earnings were as follows:

                                               Three Months Ended
                                                   March 31,     
          (In millions)                         1997        1996 

          Retirement Services                  $  63       $  60
          Life Insurance                         104          91

                                     -10-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

          Consumer Finance                        39          28
           Total segment earnings              $ 206       $ 179




















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

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 the investment spread and operating expenses, contribute
to the segment's profitability.  Segment results were as follows:

                                               Three Months Ended
                                                   March 31,     
          (In millions)                          1997       1996 

          Segment earnings                      $    63    $    60
          Assets
           Investments                           21,956     21,460
           Separate Accounts                      7,435      5,106
          Sales                                     448        307
          Deposits
           Fixed                                    424        426
           Variable                                 421        282

Segment earnings  for the three months  ended March 31, 1997,  compared to the
same period of 1996, increased 6%, primarily due to asset growth over the past
twelve  months.    Asset  growth,  excluding  the  fair  value  adjustment  on
securities, was $3.5  billion, or 13%, from  March 31, 1996 to  March 31, 1997
and $.7  billion, or 2%, from  December 31, 1996, reflecting  strong sales, an
increase in total deposits, and market appreciation in Separate Accounts.

Sales for the  three months ended  March 31, 1997  increased $141 million,  or
46%, compared to the  same period in 1996 primarily due  to increased sales of

                                     -11-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

the  Portfolio Director and Portfolio Director 2 product series, which provide
numerous variable investment options.  Variable deposits increased 49% for the
three  months ended March 31, 1997, compared to  the same period in 1996, as a
result  of  policyholders' demand  for equity  investments  due to  the strong
performance of the stock market.  The segment's Separate Account assets, which
relate to variable account options, increased $2.3 billion from March 31, 1996
to March 31, 1997 and $.3 billion from December 31, 1996, reflecting both  the
increased sales and the strong market appreciation.















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

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

                                                Three Months Ended
                                                    March 31,     
          ($ in millions)                        1997        1996 

          Net investment income                 $ 420       $ 411
          Investment yield                       7.93%       8.10%
          Average crediting rate                 6.18        6.25
          Investment spread - 
           fixed accounts                        1.75        1.85

Net investment income, the primary component of revenues, increased 2% for the
first three  months of 1997  compared to the  same period of  1996, reflecting
growth in invested assets, partially offset by a decrease in investment yield.
Investment yield for the three months ended March 31, 1997  decreased 17 basis
points compared  to the same period in  1996.  In response  to these declining
yields,  the company adjusted the  rates credited to  its policyholders during
first  quarter 1997.   As a  result, the  investment spread  on fixed accounts
declined only 10 basis points in comparison to first quarter 1996.

The  rate of policyholder  surrenders of fixed  accounts was  5.74% of average
reserves for the first  three months of  1997 compared to  5.44% for the  same
period  in 1996.   The increase was  primarily due to  customer preference for
variable account options,  competition from mutual  funds and other  financial
institutions, and the trend toward lower fixed interest crediting rates.

The  ratio of operating expenses to average  assets improved to .48% for first
quarter 1997 from  .52% for first quarter  1996 due to an  increase in average

                                     -12-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

assets, which  more than offset an  increase in operating  expenses related to
growth in the business.






















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

Life Insurance

The Life  Insurance segment  provides traditional and  interest-sensitive life
insurance  and annuities to three  defined markets, based  on household income
and  product  needs.   Recent acquisitions  of  companies that  complement the
segment's existing markets and distribution systems have contributed to growth
and  profitability.    Segment  profitability   is  a  function  of  premiums,
investment spread, mortality, and operating expenses.  Segment results were as
follows:

                                               Three Months Ended
                                                   March 31,     
          (In millions)                         1997       1996  

          Segment earnings                     $   104    $    91
          Premiums and other considerations        416        412
          Net investment income                    389        372
          Insurance and annuity benefits           447        464
          Assets                                24,918     24,672

Segment  earnings  for  first quarter  1997  compared  to  first quarter  1996
increased 14% primarily due to the acquisition of Independent Life on February
29,  1996.  Premiums and  other considerations increased  1% and insurance and
annuity benefits decreased  4% primarily due to first quarter 1996 including a
$27 million  group annuity  purchase and  the effect  of the  Independent Life
acquisition.  Asset growth, excluding the fair value adjustment on securities,
was  $513 million,  or 2%,  from March  31, 1996  to March  31, 1997  and $180
million, or 1%, from December 31, 1996, primarily due to sales and an increase

                                     -13-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

in deposits.

Information regarding sales and deposits was as follows:

                                                Three Months Ended
                                                    March 31,     
          (In millions)                          1997        1996 

          Life Insurance
           Sales                                $  78       $  69
           Deposits                               181         170
          Annuities
           Sales                                   92          97
           Deposits                               128         109











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

Life insurance sales and  deposits for first quarter 1997  exceeded comparable
1996 amounts by  14% and 7%,  respectively, due to  a number of new  marketing
initiatives  and the  acquisition of  Independent Life  on February  29, 1996.
Annuity  sales  for the  three  months  ended March  31,  1997  were 5%  below
comparable prior year  sales, primarily due to increasingly competitive market
conditions.   Annuity deposits for such periods increased 17% primarily due to
increased structured settlement sales.

Net investment income increased $17 million for the first three months of 1997
compared  to the  same period  in 1996,  primarily due  to the  acquisition of
Independent Life on February 29, 1996.  The average investment yield, interest
crediting rate, and investment spread for the primary operating companies were
as follows:

                                                Three Months Ended
                                                    March 31,     
                                                 1997        1996 

          American General Life
           Investment yield                      7.72%       7.78%
           Average crediting rate                5.89        5.87
           Investment spread                     1.83        1.91

          American General Life and Accident
           Investment yield                      8.39%       8.56%
           Average crediting rate                6.50        6.74
           Investment spread                     1.89        1.82

                                     -14-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

          Franklin Life
           Investment yield                      8.36%       8.48%
           Average crediting rate                6.28        6.59
           Investment spread                     2.08        1.89

Investment yields decreased at  the primary operating companies for  the first
three months of 1997 compared to the same period in 1996, reflecting declining
interest rates  on new investments purchased  in 1996 and 1997,  combined with
the inclusion of  Independent Life  (at American General  Life and  Accident),
which has  a lower yield,  for a  full quarter in  1997.   Although investment
spreads  have fluctuated at the primary operating companies, these spreads are
still within product pricing assumptions.

Death  claims, included in insurance  and annuity benefits,  increased 5% from
1996 to 1997,  primarily due to  the acquisition of  Independent Life.   Death
claims per $1,000  of in force were  $4.58 for the first three  months of 1997
compared to  $4.49 for the same period in 1996.  Overall, mortality experience
was within product pricing assumptions.







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
16.62% for the  first three months  of 1997, compared  to 14.70% for the  same
period  in  1996,  due  to  the  higher expense  ratio  at  Independent  Life.
Independent Life's expense  ratio exceeds  those of the  company's other  life
insurance subsidiaries  because anticipated expense savings from consolidation
of its operations have not been fully realized to date.

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:

                                                Three Months Ended
                                                    March 31,     
          ($ in millions)                         1997      1996  

          Segment earnings                      $    39   $    28
          Finance receivables                     7,454     8,020
          Yield on finance receivables            17.09%    18.14%
          Borrowing cost                           6.71      6.93
          Spread                                  10.38     11.21

Segment earnings for  the three  months ended  March 31,  1997, increased  $11
million,  or 37%, compared to the same period of 1996.  The increase primarily
relates to an improvement in credit quality during first quarter 1997.

                                     -15-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 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.

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.   During  1996,  the company  purchased real
estate-secured  receivables   totaling  $754  million,   which  increased  the
proportion of these receivables  to 51% at March 31, 1997,  compared to 36% at
March 31, 1996.








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

Total finance receivables  at March 31, 1997 decreased $566 million from March
31,  1996 and $171 million from December 31,  1996.  All lines of receivables,
except for real estate-secured consumer loans, decreased compared  to December
31,  1996 and March  31, 1996, due  to management's action  program to improve
credit quality and  the December 1996  reclassification of two  non-strategic,
underperforming  finance receivable portfolios to assets held for sale.  These
portfolios consisted of $520  million of bank credit card receivables and $355
million of  private label finance receivables.   The assets held  for sale are
carried  at net  realizable value,  after considering  related expenses.   The
carrying amount at March 31,  1997 was $634 million, compared to  $667 million
at  December  31, 1996.   The  decrease was  due  to the  net activity  of the
associated  finance  receivables  and  their related  results  of  operations.
Discussions with  potential purchasers are continuing;  however, no definitive
sale agreement has been signed to date.

Finance charge revenues decreased  $51 million for  the first three months  of
1997,  compared to the same period in  1996, due to lower average receivables,
resulting  from reclassification of the  receivables to assets  held for sale,
combined with a 105 basis points decline in yield on finance receivables.  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  83 basis  points resulting  from the  decrease in  yield, partially
offset by lower short-term borrowing cost.

The allowance  for finance receivable  losses, delinquencies, and  charge offs

                                     -16-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

were as follows:

                                              Three Months Ended
                                                  March 31,      
          ($ in millions)                      1997        1996  

          Allowance for finance 
           receivable losses                   $ 390       $ 487
            % of finance receivables           5.23%       6.07%

          Delinquencies                        $ 304       $ 354
            % of finance receivables           3.76%       4.03%

          Charge offs                          $  73       $ 114
            % of average finance 
             receivables                       3.83%       5.50%










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

The  allowance, delinquency,  and charge  off ratios  decreased for  the three
months ended March  31, 1997 compared to the same period in 1996 primarily due
to the  increased  proportion  of  real  estate-secured  receivables  and  the
reclassification  of the portfolios  to assets held  for sale.   Excluding the
portfolios held for sale, the delinquency and charge off ratios were 3.76% and
4.62%, respectively, for the three months ended March 31, 1996.

The delinquency ratio decreased 7 basis points from 3.83% at December 31, 1996
to 3.76% at March 31, 1997 and the charge off ratio, excluding  the portfolios
held  for sale, decreased 120 basis points  from 5.03% for fourth quarter 1996
to 3.83% for  first quarter 1997.  These decreases  resulted from the positive
impact  of management's  action  program  to  improve  credit  quality.    The
allowance ratio  increased 5 basis points  from 5.18% at December  31, 1996 to
5.23% at  March 31,  1997 due  to a decrease  in average  finance receivables,
partially  offset  by  a $5  million  decrease in  the  allowance  for finance
receivable losses in first quarter 1997 resulting from improved credit quality
of the receivables portfolio.

Operating expenses decreased $14 million,  or 10%, for the three months  ended
March  31, 1997,  compared to  the same period  in 1996.   As  a percentage of
average finance receivables, operating  expenses were 6.04% and 6.09%  for the
three months ended  March 31, 1997  and 1996, respectively.   The decrease  in
operating  expenses  is  primarily  due to  reclassifying  operating  expenses
(associated with servicing the  portfolios for sale) to assets held  for sale,
decreased collection expenses, and lower expenses due to workforce  reduction,
partially offset by a  decrease in deferral of finance  receivable origination

                                     -17-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

costs.

Management  believes   that  the   anticipated  sale  of   the  non-strategic,
underperforming   portfolios   combined  with   the  ongoing   credit  quality
improvement  program will continue to  result in improved  earnings.  However,
adverse changes  in credit  fundamentals within  the consumer finance  market,
including the  current high level  of personal bankruptcies,  could negatively
impact expected results.


                                  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.











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

Fair Value of Securities (SFAS 115).  An increase in market interest rates and
resulting  decreases in  bond  values during  the first  three months  of 1997
caused a $1.0 billion decrease in the fair value adjustment  to fixed maturity
securities and a related $414  million decrease in shareholders' equity.   The
components of the adjustment to report fixed maturity and equity securities at
fair value at  March 31, 1997 and December  31, 1996, and the change,  were as
follows:

                                     March 31,     December 31,
(In millions)                          1997            1996        Change 

Fair value adjustment to fixed 
 maturity securities                  $  323         $ 1,355      $(1,032)
Adjusted by:
  Decrease in DPAC/CIP                  (118)           (512)         394 
  Increase in deferred income taxes      (77)           (301)         224 
Net unrealized gains on fixed
  maturity securities                    128             542         (414)
Net unrealized gains on equity
  securities                              14              17           (3)
     Net unrealized gains on
       securities                     $  142         $   559      $  (417)

Accounting  rules do  not  permit adjustment  to fair  value of  the insurance
liabilities  supported by  these  securities, thereby  creating volatility  in

                                     -18-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

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.

Fixed Maturity  Securities.   Fixed  maturity  securities represented  86%  of
invested assets at March  31, 1997.  Information regarding  the fixed maturity
securities portfolio, which included bonds and redeemable preferred stocks, at
March 31, 1997 was as follows:

                                   March 31,                Average Credit
(In millions)                        1997           %           Rating    

Investment grade                    $27,339         72%          A   
Mortgage-backed                       9,307         24           AAA 
Below investment grade                1,492          4           BB- 
 Total fixed maturities             $38,138        100%          A+  

Collateralized  mortgage obligations  (CMOs)  are purchased  to diversify  the
portfolio risk characteristics from  primarily corporate credit risk to  a mix
of credit and cash flow risk.  CMOs represented 89% and 88% of mortgage-backed
securities at March 31, 1997 and December 31, 1996, respectively.







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

Below investment grade fixed maturity securities, those rated below BBB-, were
$1.5  billion at  March 31,  1997 and  December 31,  1996.   These investments
represented 4% of total fixed maturity securities at both balance sheet dates.
Net investment income from below  investment grade fixed maturity  securities,
including realized investment gains and losses,  was $23 million for the first
three months of 1997 and 1996.

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 .01%  of total fixed  maturity securities  at
March 31, 1997 and December 31, 1996.

Mortgage Loans.   Mortgage  loans on real  estate represented  7% of  invested
assets at March 31, 1997.   Information regarding the mortgage  loan portfolio
at March 31, 1997 was as follows:

                                  March 31,      Non-Performing Loans
(In millions)                       1997           Amount        % 

Commercial loans                   $ 3,021         $ 150        5.0%
Allowance for losses                   (77)          (22)
  Total mortgage loans             $ 2,944         $ 128 

Non-performing mortgage loans  include loans  delinquent 60 days  or more  and

                                     -19-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

commercial loans  that have  been restructured  and  are currently  performing
under the modified terms.   These loans represented  5.0% of total  commercial
loans at March 31, 1997, compared to 5.2% at December 31, 1996.

At March  31, 1997, $264 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  under-
collateralized.   This amount compares to  $282 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.
















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

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

                                                    Three Months Ended
                                                        March 31,     
(In millions)                                        1997        1996 

Sales and calls
  Fixed maturity securities                         $ (14)      $ 14
  Equity securities                                     1         16
Write-downs/reserve changes                             1         (4)
Other                                                   5          1
  Total realized investment gains (losses)          $  (7)      $ 27

Write-downs and reserve  changes were related to mortgage loans  for the three
months  ended March 31,  1997 and  to fixed  maturity securities  and mortgage
loans in the comparable prior period.


                               CAPITAL RESOURCES

Corporate  Debt.  Corporate debt  is incurred primarily  to fund acquisitions,
share repurchases, and capital needs of subsidiaries. Corporate debt increased

                                     -20-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

$32  million from December  31, 1996  to March 31,  1997, primarily due  to an
increase  in  borrowings to  fund  increased  capitalization of  the  business
segments and repurchases of American General's  common stock, partially offset
by  the  net  proceeds  from  the  March  1997 issuance  of  8-1/8%  preferred
securities.

Interest expense on corporate debt decreased  $3 million, or 9%, for the three
months ended March 31, 1997 compared to the same period in 1996, primarily due
to  lower average short-term borrowings in the  first three months of 1997 due
to the  proceeds from issuance  of preferred securities  being used  to reduce
short-term debt.

The ratio of  corporate debt  to corporate capital  (excluding the fair  value
adjustment on  securities) was 18.7% at  March 31, 1997, compared  to 19.6% 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  $300 million  from  December  31,  1996 to  March  31,  1997,
primarily due to the  decline in finance receivables and  management's actions
to  return the Consumer Finance segment's debt  to tangible net worth ratio to
the target level of 7.5 to 1.





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

Interest expense on Consumer Finance  debt decreased $13 million, or  10%, for
the three  months ended March  31, 1997 compared  to the same period  in 1996,
primarily due to  the reclassification of interest expense to  assets held for
sale.

Redeemable Equity.  Redeemable equity increased $498 million from December 31,
1996  to March 31,  1997, due to  the March 1997 issuance  of 8-1/8% preferred
securities.   Net proceeds from this  issuance were used to  reduce short-term
debt.

Shareholders'  Equity.  Shareholders'  equity decreased  from $5.6  billion at
December 31, 1996 to $5.2 billion at March 31, 1997, primarily due to the $417
million decrease 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 fixed maturity securities (see "Investments - Fair Value
of Securities (SFAS 115)" on page 18).

Rating Agencies.  Following the disclosure of the merger with USLIFE, Standard
& Poor's  (S&P), Duff &  Phelps, Moody's, and other  rating agencies announced
that the ratings of certain securities  of American General and certain of its

                                     -21-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

subsidiaries  and  the claims-paying  ability  ratings  of American  General's
principal life insurance subsidiaries would be reviewed for possible downgrade
or other  action.  Subsequently, S&P  indicated that it expects  to reduce its
ratings  of  certain  securities  of  American  General  and  certain  of  its
subsidiaries by  one notch, upon  completion of  the merger with  USLIFE.   In
addition, Duff  & Phelps confirmed  its ratings while  reducing the rating  of
American  General's preferred securities from "A+" to "A".  American General's
ratings remain under review by Moody's.


                                   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.





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

Parent Company Cash Flows
                                                  Three Months Ended 
                                                      March 31,      
(In millions)                                      1997        1996  

Net cash (used for)/provided 
 by operating activities                          $ (51)      $ 132  
Dividends paid by Life Insurance and
 Retirement Services segments                         -          78  
Dividends paid by Consumer Finance segment            -          27  

Net  cash provided  by operating  activities decreased  in first  quarter 1997
compared  to first  quarter  1996 since  no dividends  were  paid to  American
General   because  the   company  is   currently  re-evaluating   the  capital
requirements  for  its business  segments.   The  business segments  expect to
resume payment of dividends to American General later in 1997.

Segment Cash Flows
                                                  Three Months Ended 
                                                      March 31,      
(In millions)                                      1997        1996  

                                     -22-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

Life Insurance and Retirement Services
 Net cash provided by operating activities        $ 510       $ 520    
 Net cash provided by fixed policyholder
   account deposits, net of withdrawals              92          87    
 Variable account deposits, net of withdrawals      469         404    

Consumer Finance
 Net cash provided by operating activities          169         173    

Net  cash  flows  generated by  the  Life  Insurance  and Retirement  Services
segments  include cash provided by  operating activities and  cash provided by
fixed  policyholder account  deposits, net  of withdrawals.   Cash  flows from
these  sources in  first quarter  1997 approximated  the amounts  in  the same
period in  1996.  Variable  account deposits,  net of withdrawals,  related to
Separate  Accounts  that  are  not  included  in  the  consolidated  condensed
statement of  cash flows, increased $65  million in the first  three months of
1997 compared to the same period of 1996 due to strong sales in the Retirement
Services segment.

The Consumer Finance segment's  cash provided by operating activities  for the
first  three months of 1997 approximated the  amount in the first three months
of 1996.









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:
                                                       Calls, Maturities,
                                    Purchases              and Sales     
                                Three Months Ended     Three Months Ended
(In millions)                       March 31,              March 31,     
                                 1997        1996       1997        1996 
Fixed maturity securities       $3,486      $1,958     $2,889      $1,370 
Mortgage loans                      92          61        120          95 
Equity securities                    -           1         19          87 
Other                               45          20         40          37 
  Total                         $3,623      $2,040     $3,068      $1,589 

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 March
31, 1997, committed credit facilities totaled $3.5 billion, which increased to
$3.8 billion at May 5, 1997.  There were no outstanding borrowings under these
facilities.



                                     -23-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

                          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;  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.  The
Consumer  Finance segment's future results also could be adversely affected if
finance  receivable  delinquencies and  net charge  offs  increase or  fail to
achieve levels anticipated by management, despite the company's initiatives to
improve credit  quality.   Failure  to dispose  of assets  held  for sale  for
carrying value  could also  adversely affect  this  segment's future  results.
Investors  are also  directed to  other risks  and uncertainties  discussed in
documents filed by the company with the Securities and Exchange Commission.











                          PART II.  OTHER INFORMATION

Item 1. Legal Proceedings.

In addition to those lawsuits  or proceedings disclosed in the company's  1996
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 increase and
creates the potential for an unpredictable judgment in any given suit.

Certain of American General's subsidiaries are defendants in lawsuits filed as
purported class actions asserting claims related to sales practices of certain
life  insurance products.   Because  these cases  are in  the early  stages of
litigation, it  is premature to  address their  materiality.   The claims  are
being defended vigorously by the subsidiaries.

                                     -24-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997

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

a.   Exhibits.

     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.

b.   Reports on Form 8-K.

     (1)  Current Report on Form 8-K dated February 12,  1997, with respect to
          the issuance of  a joint news  release announcing the  signing of  a
          definitive  agreement under  which USLIFE  will merge  into American
          General  in  a transaction  valued at  $1.8  billion, or  $49.00 per
          share,  subject   to  approval   by  USLIFE  and   American  General
          shareholders and requisite regulatory authorities.

     (2)  Current Report on Form 8-K dated February 21, 1997, with respect  to
          the filing  of American General's Consolidated  Financial Statements
          and  the related Management's Discussion  and Analysis for the three
          years ended December 31, 1996.







                                    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) 



                                     -25-
<PAGE>



   AMERICAN GENERAL CORPORATION
             FORM 10-Q
For the Quarter Ended March 31, 1997



Date:  May 14, 1997





























                                 EXHIBIT INDEX



   Exhibit

     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.











                                     -26-
<PAGE>