FORM 10-Q

                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.  20549


[X]    Quarterly Report Pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934 

For the quarterly period ended June 30, 1997.

                                              OR

[ ]    Transition Report Pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934

For the transition period from                to

                  Commission File No. 0-10894

                    ARNOLD INDUSTRIES, INC.                     
    (Exact name of registrant as specified in its charter)

        Pennsylvania                                23-2200465        
(State or other jurisdiction of                    (IRS Employer
incorporation or organization)                  Identification No.)

            625 South Fifth Avenue, Lebanon, Pennsylvania
              (Address of principal executive offices)

                              17042
                           (Zip Code)

                         (717) 274-2521
         (Registrant's telephone number, including area code)


                           No Change
       (Former name, former address and former fiscal year,
                    if changed since last report)

       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

       Common Stock, par value $1.00 per share: 25,875,040 shares
outstanding (which excludes treasury shares) as of August 6,
1997.


                            PART I.  FINANCIAL INFORMATION 


Item 1.      Financial Statements.

Condensed Consolidated Balance Sheets      -    June 30, 1997 and
       (Unaudited)                                December 31, 1996

Condensed Consolidated Statements of       -    June 30, 1997
       Income (Three and Six Month                and 1996
       Periods - Unaudited)

Condensed Consolidated Statements of       -    June 30, 1997
       Cash Flows (Six Month                      and 1996
       Periods - Unaudited)

Notes to Condensed Consolidated Financial Statements


                                 ARNOLD INDUSTRIES, INC.
                          CONDENSED CONSOLIDATED BALANCE SHEETS
                                     (Unaudited)

                                                June 30,      December 31,
                                                  1997            1996
ASSETS
      Current Assets
        Cash and Cash Equivalents               29,032,204      19,704,303
        Marketable Securities                   12,685,061      21,917,940
        Accounts Receivable, Net                36,467,637      30,648,955
        Deferred Income Taxes                    7,801,066       7,649,269
        Prepaid Expenses and Supplies            4,519,718       3,764,475
            Total Current Assets                90,505,686      83,684,942

      Property and Equipment                   332,809,292     322,812,162
      Less:  Accumulated Depreciation          132,612,485     123,198,243
            Total Property and Equipment       200,196,807     199,613,919

      Other Assets
        Goodwill, Net                            8,678,068       8,862,555
        Investments in Limited Partnerships      9,883,198      10,144,793
        Other                                      819,649         806,213
            Total Other Assets                  19,380,915      19,813,561

            TOTAL ASSETS                       310,083,408     303,112,422

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current Liabilities
        Notes Payable                           16,222,367      16,222,367
        Accounts Payable                        12,583,499       9,332,066
        Income Taxes                             1,112,781         456,332
        Estimated Liability for Claims           9,350,034       6,451,931
        Accrued Expenses - Other                14,348,956      11,313,407
            Total Current Liabilities           53,617,637      43,776,103

      Long-Term Liabilities
        Estimated Liability for Claims          13,689,000      13,689,000
        Deferred Income Taxes                   30,845,778      31,095,222
        Notes Payable                            2,286,733       3,873,696
        Other                                    1,604,307       1,531,707
            Total Long-Term Liabilities         48,425,818      50,189,625

      Stockholders' Equity
        Common Stock                            29,942,628      29,942,628
        Paid-In Capital                            262,363         209,000
        Retained Earnings                      198,931,160     187,922,593
        Treasury Stock - At Cost               (21,096,198)     (8,927,527)
           Total Stockholders' Equity          208,039,953     209,146,694

           TOTAL LIABILITIES AND STOCKHOLDERS' 
               EQUITY                          310,083,408     303,112,422

THE ACCOMPANYING NOTES, HERE AND FOLLOWING, ARE AN INTEGRAL PART OF THESE 
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                   ARNOLD INDUSTRIES, INC.
                        CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                       (Unaudited)

                           Six Months Ended             Three Months Ended 
                                June 30,                     June 30,
                           1997          1996           1997        1996

Operating Revenues       187,879,966  172,502,670    97,340,744  90,110,880

Operating Expenses       161,281,032  152,801,974    82,289,763  78,643,743
      
Operating Income          26,598,934   19,700,696    15,050,981  11,467,137
                                    
Interest Expense            (651,199)    (630,644)     (319,941)   (308,120)

Other Income
  (Deductions)               544,328     (220,971)      329,007      (6,988)

Income Before Income 
  Taxes                   26,492,063   18,849,081    15,060,047  11,152,029

Income Taxes               9,660,658    6,652,003     5,549,798   3,997,756

Net Income                16,831,405   12,197,078     9,510,249   7,154,273

Weighted Average Shares 
  Outstanding (Note)      26,471,650   26,652,266    26,277,369  26,654,348

Net Income per Common 
  Share (Note)                .64          .46           .37         .27
      
Dividends per Common
  Share                       .22          .22           .11         .11

NOTE:     Common share equivalents are not included since the effect of
          their inclusion is not material.

          In February 1997, the Financial Accounting Standards Board
          issued Statement of Financial Accounting Standards No. 128
          "Earnings Per share" (SFAS 128).  SFAS 128 establishes standards
          for computing and presenting earnings per share and applies to
          entities with publicly held common stock or potential common
          stock.  SFAS 128 simplifies the standards for computing earnings
          per share previously found in APB Opinion No. 15, "Earnings Per
          Share," by replacing the presentation of primary earnings per
          share with a presentation of basic earnings per share.  It also
          requires dual presentation of basic and diluted earnings per
          share on the face of the income statement for all entities with
          complex capital structures.

          SFAS 128 is effective for financial statements issued for periods 
          ending after December 15, 1997.  The effect of SFAS 128 on the 
          Company's earnings per share has not been determined.

THE ACCOMPANYING NOTES, HERE AND FOLLOWING, ARE AN INTEGRAL PART OF THESE 
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                 ARNOLD INDUSTRIES, INC.
                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (Unaudited)


                                                     Six Months Ended
                                                          June 30,
                                                     1997          1996    
Operating Activities
  Net Income                                        16,831,405   12,197,078
  Adjustments to Reconcile Net Income to Net
    Cash Provided by Operating Activities:
      Depreciation and Amortization                 15,030,499   13,953,156
      Provision for Deferred Taxes                    (401,240)     695,671
      Other                                           (511,188)    (223,601)
      Changes in Operating Assets and
        Liabilities:
        (Increase) in Accounts Receivable           (5,818,682)  (2,979,491)
        (Increase) Decrease in Prepaid Expenses
          and Supplies                                (755,243)     171,106
        Increase in Accounts Payable and
          Accrued Expenses                           9,841,534    6,234,403
        Other                                           72,600       67,600
          Net Cash Provided by Operating 
            Activities                              34,289,685   30,115,922

Investing Activities
  Proceeds from Sale of Investment Securities       15,688,938    1,338,914
  Purchase of Investment Securities                 (6,484,011)  (8,048,724)
  Proceeds from Disposition of Property and 
    Equipment                                        2,348,872    2,140,775
  Purchase of Property and Equipment               (17,006,510) (13,789,409)
  Capital Contributions to Limited Partnerships     (1,586,963)    (741,247)
  Other                                                 16,036       24,206
          Net Cash Used In Investing Activities     (7,023,638) (19,075,485)

Financing Activities
  Cash Dividends Paid                               (5,822,839)  (5,863,412)
  Purchase of Treasury Stock                       (12,199,922)         -0-
  Other                                                 84,615       51,075
          Net Cash Used In Financing Activities    (17,938,146)  (5,812,337)
      
Increase in Cash and Cash Equivalents                9,327,901    5,228,100

Cash and Cash Equivalents at Beginning of Year      19,704,303    5,769,772

Cash and Cash Equivalents at End of Period          29,032,204   10,997,872

Supplemental Disclosures of Cash Flow
  Information:
  Cash paid during the period for:
    Interest                                           647,933      652,922
    Income Taxes                                     9,411,125    4,503,015


THE ACCOMPANYING NOTES, HERE AND FOLLOWING, ARE AN INTEGRAL PART OF THESE 
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                              ARNOLD INDUSTRIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)                    
        

Note I:      Basis of Presentation

       The financial information included herein is unaudited;
however, such information reflects all adjustments (consisting
solely of normal adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the
interim period.  This financial information should be read in
conjunction with the Financial Statements and Notes thereto
included in the Company's latest annual report on Form 10-K and
any intervening reports.

       The results of operations for the three and six-month
periods ending June 30, 1997, and June 30, 1996, are not neces-
sarily indicative of the results to be expected for the full
year.  


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

       Operating Revenues for the second quarter of 1997 were
$97,340,744, an increase of $7,229,864 or 8% from Operating Reve-
nues for 1996's second quarter.  For the same period, Operating
Expenses increased $3,646,020 or 4.6%; Income Before Income Taxes
increased $3,908,018, an increase of 35%; and Net Income in-
creased $2,355,976 or 33%.  Earnings Per Share increased from
$.27 to $.37 for the respective quarters.

       Operating Revenues for the six months ended June 30, 1997,
were $187,879,966, an increase of $15,377,296 or 8.9% over the
comparable period in 1996.  For the same period, Operating
Expenses increased $8,479,058 or 5.5%; Income Before Taxes
increased $7,642,982, an increase of 40.5%; and Net Income in-
creased $4,634,327 or 38%.  Earnings Per Share increased from
$.46 to $.64 for the respective six-month periods.

       The traffic of New Penn Motor Express, Inc. ("New Penn"),
the Company's less-than-truckload carrier, increased during the
second quarter of 1997, and its operating revenues for the
quarter were greater than those of the second quarter of 1996. 
Operating income for the second quarter substantially exceeded
1996's operating income for the same period.

       Revenues among the Arnold Transportation Services group,
which consists of three regional truckload carriers, also con-
tinued to grow.  Arnold Transportation Services, Inc. ("ATS"),
SilverEagle Transport, Inc. ("SilverEagle") and D.W. Freight,
Inc. ("DW") together produced a revenue increase of approximately
$880,000 when compared to their 1996 second quarter performance. 
This revenue increase resulted primarily from additional freight
as opposed to higher rates.  The three regional truckload carri-
ers are being consolidated; the consolidation process should be
completed in 1997.

       Although all of the Company's operating subsidiaries con-
tinue to experience fierce price competition from other carriers
in the trucking industry, Company management remains focused on
improving operating efficiencies.  At the same time, management
continues to seek growth opportunities by offering expanded
trucking and warehousing related services to meet the needs of
existing and prospective customers.  Company management will
continue to seek opportunities for profitable expansion of the
Company through acquisitions and value-added services.

       Set forth below is a schedule of the Unaudited Operating
Revenues, Expenses and Operating Income of the LTL and TL
companies for the second quarters of 1997 and 1996 and for the
six (6) month periods ended June 30, 1997, and June 30, 1996:

                                            (Dollars in Thousands)
                                         Second Quarter Ended June 30,
                                           1997               1996

                                      Amount      %       Amount     %
NEW PENN MOTOR EXPRESS
AND RELATED COMPANIES (LTL)
       Operating Revenues             51,834    100.0     45,484    100.0
       Operating Expenses             40,248     77.6     36,785     80.9
         Operating Income             11,586     22.4      8,699     19.1

ARNOLD TRANSPORTATION SERVICES (TL)
       Operating Revenues             45,507    100.0     44,627    100.0
       Operating Expenses             42,042     92.4     41,859     93.8
         Operating Income              3,465      7.6      2,768      6.2


                                           (Dollars in Thousands)
                                         Six Months Ended June 30,
                                         1997                  1996

                                    Amount      %         Amount      %  
NEW PENN MOTOR EXPRESS
AND RELATED COMPANIES (LTL)
       Operating Revenues           100,309    100.0      86,987    100.0
       Operating Expenses            79,222     79.0      71,371     82.0
         Operating Income            21,087     21.0      15,616     18.0

ARNOLD TRANSPORTATION SERVICES (TL)
       Operating Revenues            87,571    100.0      85,516    100.0
       Operating Expenses            82,059     93.7      81,431     95.2
         Operating Income             5,512      6.3       4,085      4.8


       The Company's working capital at the end of the second quar-
ter of 1997 was $36,888,049, which is a decrease of $4,390,959 or
10.6% from the end of the first quarter of 1997.

       The Company's investment in Property and Equipment (Less
Accumulated Depreciation) as of the end of the second quarter of
1997 stood at $200,196,807.  This figure represents an increase
from December 31, 1996, of $582,888 or .3%.  The increase re-
flects the Company's ongoing capital expansion program.  Funding
for the Company's continuing capital expansion program will be
accomplished through the use of cash generated from current
operating and investment activities, supplemented, when neces-
sary, by short or long-term debt financing.


                             PART II.  OTHER INFORMATION 

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

       On May 7, 1997, the Company held its Annual Meeting of
Stockholders.  The following individuals were elected to serve as
Directors for a new two-year term:

       Name                      For                 Withheld

       Heath L. Allen            23,931,205          162,352
       Kenneth F. Leedy          23,936,481          157,076
       Carlton E. Hughes         23,937,291          156,266

       Edward H. Arnold, Ronald E. Walborn and Arthur L. Peterson
continue in their present two-year terms as Directors.


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

             (a)    Exhibit 27 - Financial Data Schedule

             (b)    NONE


                                      SIGNATURES 


       Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.  


                                        ARNOLD INDUSTRIES, INC.
                                            (Registrant)


Date:  August 14, 1997                  Heath L. Allen, Secretary


Date:  August 14, 1997                  Ronald E. Walborn, Treasurer