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 (Fee Required)
               For the quarterly period ended April 30, 1999

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
                 For the transition period from     to

                                     Commission File No. 1-8709


               Canal Capital Corporation and Subsidiaries
           (Exact name of registrant as specified in its charter)


      Delaware                                         51-0102492
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                   Identification No.)

    717 Fifth Avenue, New York, NY                           10022
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code   (212) 826-6040


                                  NONE
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


Indicate  the number of shares outstanding for each of the issuer's classes
of common stock, as of the latest practical date:


    Title of each class          Shares outstanding at May 31, 1999
Common stock, $0.01 par value                4,326,929

(This document contains 25 pages)


                           CANAL CAPITAL CORPORATION & SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS
                            APRIL 30, 1999 AND OCTOBER 31, 1998


                                    APRIL 30,          OCTOBER 31,
                                     1999                1998
                                  (UNAUDITED)           (AUDITED)

ASSETS:



CURRENT ASSETS:

 CASH AND CASH EQUIVALENTS        $   107,114        $     33,538
 NOTES AND ACCOUNTS RECEIVABLE        193,094             211,070
  ART INVENTORY, NET OF A VALUATION ALLOWANCE OF
  $ 1,500,000  AT APRIL 30, 1999 AND
  OCTOBER 31, 1998, RESPECTIVELY      500,000             500,000
 INVESTMENTS                          361,267             278,175
 PREPAID EXPENSES                     164,108             173,938

       TOTAL CURRENT ASSETS         1,325,583           1,196,721




NON-CURRENT ASSETS:

 PROPERTY ON OPERATING LEASES, NET OF
  ACCUMULATED DEPRECIATION OF $1,385,123
  AND $ 1,671,222 AT APRIL 30, 1999 AND
  OCTOBER 31, 1998, RESPECTIVELY    4,757,043           5,861,064


 ART INVENTORY NON-CURRENT, NET OF
  VALUATION ALLOWANCE OF $ 1,278,700
  AT APRIL 30, 1999 AND $1,900,000 AT
  OCTOBER 31, 1998, RESPECTIVELY      734,907             949,125





OTHER ASSETS:

 PROPERTY HELD FOR DEV. OR RESALE   1,074,695           1,318,095
 DEFERRED LEASING AND FINANCING COSTS  13,590              12,866
 DEPOSITS AND OTHER                   112,777             169,578

                                    1,201,062           1,500,539

                                  $ 8,018,595         $ 9,507,449
                                 ============         ===========




                                     2


                  CANAL CAPITAL CORPORATION & SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                    APRIL 30, 1999 AND OCTOBER 31, 1998

                                    APRIL 30,       OCTOBER 31,
                                      1999              1998
                                   (UNAUDITED)         (AUDITED)
LIABILITIES & STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:

 CURRENT PORTION OF LONG-TERM DEBT   110,000            110,000
 ACCOUNTS PAYABLE AND ACCRUED EXP  1,776,559          2,061,210
 INCOME TAXES PAYABLE                 10,696             14,314

   TOTAL CURRENT LIABILITIES       1,897,255          2,185,524


LONG-TERM DEBT,LESS CURR PORTION   2,239,087          2,321,433
LONG-TERM DEBT,LESS CURRENT
     PORTION-RELATED PARTY           300,000          2,846,000

                                   2,539,087          5,167,433
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

 PREFERRED STOCK, $0.01 PAR VALUE:
  5,000,000 SHARES AUTHORIZED; 3,433,181 AND
  3,411,681 SHARES ISSUED AND OUTSTANDING
  AT APRIL 30, 1999 AND OCTOBER 31, 1998,
  RESPECTIVELY AND AGGREGATE LIQUIDATION
  PREFERENCE OF $ 34,331,810 AND $ 34,116,810
  AT APRIL 30, 1999 AND OCTOBER 31, 1998
  RESPECTIVELY                       34,332              34,117

  COMMON STOCK, $0.01 PAR VALUE:
   10,000,000 SHARES AUTHORIZED; 5,313,794
   SHARES ISSUED AND 4,326,929 SHARES OUTSTANDING
   AT APRIL 30, 1999 AND OCTOBER 31, 1998,
   RESPECTIVELY                      53,138              53,138

  PAID-IN CAPITAL                27,139,581          27,033,046

  RETAINED EARNINGS (DEFICIT)   (10,570,124)        (11,808,043)

 986,865 SHARES OF COMMON STOCK
 HELD IN TREASURY, AT COST      (11,003,545)        (11,003,545)


COMPREHENSIVE INCOME:

 VALUATION RESERVE               (1,896,838)         (1,896,838)

 UNREALIZED LOSS ON INVESTMENTS AVAILABLE
  FOR SALE                         (174,291)           (257,383)


                                  3,582,253           2,154,492



                               $  8,018,595        $  9,507,449
                              =============       =============

                                    3




           CANAL CAPITAL CORPORATION & SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
        FOR THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998



                                     1999            1998
                                  (UNAUDITED)     (UNAUDITED)

REAL ESTATE OPERATIONS:
 REAL ESTATE REVENUES:
  SALE OF REAL ESTATE            $ 3,085,000     $   235,000
  RENTAL INCOME                      263,385         363,969
  GROUND LEASE INCOME                207,800         231,000
  VOLUME BASED RENTAL INCOME               0          30,761
  OTHER INCOME                         3,484           1,874

                                   3,559,669         862,604

 REAL ESTATE EXPENSES:
  COST OF REAL ESTATE SOLD         1,449,205          53,226
  LABOR, OPERATING AND MAINTENANCE   106,294         225,764
  DEPRECIATION AND AMORTIZATION       44,361          55,712
  TAXES OTHER THAN INCOME TAXES       46,800          50,400
  GENERAL AND ADMINISTRATIVE          20,831          23,002

                                   1,667,491         408,104



INCOME FROM REAL ESTATE OPERATIONS 1,892,178         454,500


ART OPERATIONS:
 ART REVENUES:
  SALES                               24,000          48,000
  OTHER REVENUES                           0               0

                                      24,000          48,000

 ART EXPENSES:
  COST OF ART SOLD                   125,594         202,289
  VALUATION RESERVE                  (88,000)       (100,000)
  SELLING, GENERAL AND ADMINISTRATIVE 11,094          10,147

                                      48,688         112,436


LOSS FROM ART OPERATIONS             (24,688)        (64,436)











                                     6




                CANAL CAPITAL CORPORATION & SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
         FOR THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998
                       Continued ...


                                       1999           1998
                                    (UNAUDITED)     (UNAUDITED)

GENERAL AND ADMINISTRATIVE EXPENSE $  (253,461)     $  (284,414)


INCOME (LOSS) FROM OPERATIONS        1,614,029          105,650

OTHER INCOME (EXPENSE):
  INTEREST & OTHER INCOME                3,530              304
  INTEREST EXPENSE                     (63,461)         (72,831)
  INTEREST EXPENSE-RELATED PARTY       (80,000)        (136,000)
  OTHER EXPENSE                              0                0

                                      (139,931)        (208,527)


(LOSS) GAIN BEFORE PROVISION FOR INCOME
  TAXES                              1,474,098         (102,877)

PROVISION (BENEFIT) FOR INCOME TAXES         0                0

NET (LOSS)                           1,474,098         (102,877)



OTHER COMPREHENSIVE INCOME (LOSS):

  UNREALIZED LOSS ON INVESTMENTS
  AVAILABLE FOR SALE                   140,894         (293,345)



COMPREHENSIVE INCOME (LOSS)        $ 1,614,992     $   (396,222)
                                  =============    ============


INCOME (LOSS) PER COMMON SHARE   $       0.36     $      (0.10)
                                  =============    ============

















                                7



            CANAL CAPITAL CORPORATION & SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
        FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998



                                     1999            1998
                                  (UNAUDITED)     (UNAUDITED)

REAL ESTATE OPERATIONS:
 REAL ESTATE REVENUES:
    SALE OF REAL ESTATE          $ 3,145,000     $   251,000
    RENTAL INCOME                    520,005         725,845
    GROUND LEASE INCOME              438,800         462,000
    VOLUME BASED RENTAL INCOME        21,645          65,491
    OTHER INCOME                       5,408           3,738

                                   4,130,858       1,508,074

 REAL ESTATE EXPENSES:
    COST OF REAL ESTATE SOLD       1,490,102          60,071
    LABOR, OPERATING AND MAINTENANCE 205,053         438,736
    DEPRECIATION AND AMORTIZATION     96,652         111,319
    TAXES OTHER THAN INCOME TAXES     94,393         100,800
    GENERAL AND ADMINISTRATIVE        38,540          45,512

                                   1,924,740         756,438



INCOME FROM REAL ESTATE OPERATIONS 2,206,118         751,636


ART OPERATIONS:
 ART REVENUES:
    SALES                            186,400         206,200
    OTHER REVENUES                         0               0

                                     186,400         206,200

 ART EXPENSES:
    COST OF ART SOLD                839,246         761,453
    VALUATION RESERVE              (621,300)       (380,000)
    SELLING, GENERAL AND ADM         22,233          20,114

                                    240,179         401,567


LOSS FROM ART OPERATIONS            (53,779)       (195,367)













                                     4




           CANAL CAPITAL CORPORATION & SUBSIDIARIES
   CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
        FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                       Continued ...


                                   1999           1998
                                 (UNAUDITED)     (UNAUDITED)

GENERAL AND ADMINISTRATIVE EXPENSE $  (515,987)     $  (563,029)


INCOME (LOSS) FROM OPERATIONS        1,636,352           (6,760)

OTHER INCOME (EXPENSE):
  INTEREST & OTHER INCOME                9,504              931
  INTEREST EXPENSE                    (123,936)        (221,063)
  INTEREST EXPENSE-RELATED PARTY      (188,000)        (202,000)
  OTHER EXPENSE                              0                0

                                      (302,432)        (422,132)


(LOSS) GAIN BEFORE PROVISION FOR INCOME
  TAXES                              1,333,920         (428,892)

PROVISION (BENEFIT) FOR INCOME TAXES         0                0

NET (LOSS)                           1,333,920         (428,892)



OTHER COMPREHENSIVE INCOME (LOSS):
  UNREALIZED LOSS ON INVESTMENTS
  AVAILABLE FOR SALE                   83,092         (338,507)


COMPREHENSIVE INCOME (LOSS)       $ 1,417,012     $   (767,399)
                                 ============    ============


INCOME (LOSS) PER COMMON SHARE   $       0.31     $      (0.20)
                                 =============    ============

















                                5




                  CANAL CAPITAL CORPORATION & SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998




                                    1999              1998
                                 (UNAUDITED)       (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
  NET INCOME (LOSS)                  $ 1,333,920     $  (428,892)

  ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO
   NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:

   PROVISION FOR LITIGATION SETTLEMENT         0                0
   DEPRECIATION AND AMORTIZATION         104,802          122,872
   GAIN  ON SALES OF REAL ESTATE      (1,654,898)        (190,929)


CHANGES IN ASSETS AND LIABILITIES:

 NOTES AND ACCOUNTS RECEIVABLES, NET     17,956           66,247
 ART INVENTORY, NET                     214,218          378,249
 PREPAID EXPENSES AND OTHER, NET       (116,342)          61,725
 PAYABLES AND ACCRUED EXPENSES, NET    (288,269)        (129,057)


NET CASH (USED) PROVIDED
 BY OPERATING ACTIVITIES               (388,613)        (119,785)


CASH FLOWS FROM INVESTING ACTIVITIES:
 PROCEEDS FROM SALES OF REAL ESTATE   3,145,000          251,000
  PROCEEDS FROM SALE OF INVESTMENTS           0                0
  CAPITAL EXPENDITURES                  (54,285)         (17,866)
NET CASH PROVIDED BY
     INVESTING ACTIVITIES             3,090,715          233,134



CASH FLOWS FROM FINANCING ACTIVITIES:
  PROCEEDS FROM LONG-TERM DEBT-RELATED
    PARTIES                                   0           75,000
  TRANSFERS TO LONG-TERM                      0                0
 REPAYMENT OF LONG-TERM
     DEBT OBLIGATIONS                (2,628,346)        (269,202)
NET CASH USED BY
     FINANCING ACTIVITIES            (2,628,346)        (194,202)


NET (DECREASE) INCREASE IN CASH AND CASH
  EQUIVALENTS                            73,756          (80,853)
CASH AND CASH EQUIVALENTS AT
     BEGINNING OF YEAR                   33,358           28,225

CASH AND CASH EQUIVALENTS AT
     END OF YEAR                    $   107,114     $   (52,628)
                                   ============     ============


NOTE:    Canal  made  federal  and state income tax payments of $20,000 and
$16,000  and  interest  payments  of $312,000 and $423,000 in the six month
periods ended April 30, 1999 and 1998, respectively.




                                     8





       CANAL CAPITAL CORPORATION AND SUBSIDIARIES
   CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
    FOR THE YEAR ENDED OCTOBER 31, 1998 (AUDITED) AND
    FOR THE SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)

                    COMMON STOCK     PREFERRED STOCK
                    NUMBER                NUMBER
                      OF                  OF                  PAID-IN
                     SHARES   AMOUNT     SHARES     AMOUNT     CAPITAL

BAL,OCT 31,1997  5,313,794   $53,138    2,997,900   $29,979  $26,826,293

 NET INCOME (LOSS)       0         0            0         0            0
 PREFERRED STOCK DIV     0         0      413,781     4,138      206,753


 MINIMUM PEN. LIAB. ADJ  0         0            0         0            0
 UNREALIZED GAIN ON INV  0         0            0         0            0
                --------------------   ---------------------  -----------

BAL,OCT 31, 1998 5,313,794    53,138    3,411,681    34,117   27,033,046
 NET INCOME (LOSS)       0         0            0         0            0
 PREFERRED STOCK DIV     0         0       21,500       215      106,535
 MINIMUM PEN. LIAB. ADJ  0         0            0         0            0
 UNREALIZED GAIN ON INV  0         0            0         0            0
                --------------------   ---------------------   ----------


BAL,APR30, 1999  5,313,794   $53,138    3,433,181   $34,332  $27,139,581
                ====================   ===================== ============




               RETAINED    -COMPREHENSIVE (LOSS) INCOME-   TREASURY
               EARNINGS       VALUATION    UNREALIZED       STOCK
               DEFICIT         RESERVE     GAIN ON INV.    AT COST

BAL,OCT31,1997  ($10,194,335) ($1,485,641)   $   615,800  ($11,003,545)
 NET INCOME (LOSS)(1,413,470)           0              0             0
 PREFERRED STOCK DIV(200,238)           0              0             0
 MINIMUM PEN. LIAB. ADJ.   0     (411,197)             0             0
 UNREALIZED GAIN ON INV.   0            0       (873,183)            0
               -------------  -------------   ------------  ------------

BAL,OCT31, 1998  (11,808,043) ($1,896,838)      (257,383)  (11,003,545)
 NET INCOME (LOSS) 1,333,920            0              0             0
 PREFERRED STOCK DIV (96,001)           0              0             0
 MINIMUM PEN. LIAB. ADJ.   0            0              0             0
 UNREALIZED GAIN ON INV.   0            0         83,092             0
               -------------  --------------   ------------ ------------

BAL,APR30,1999  ($10,570,124) ($1,896,838)   $  (174,291) ($11,003,545)
               =============  ==============  ============= =============








                                     9




                 CANAL CAPITAL CORPORATION AND SUBSIDIARIES
               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                      SIX MONTHS ENDED APRIL 30, 1999
                                (UNAUDITED)



1.   GENERAL


     Canal  Capital  Corporation  (  Canal  ), incorporated in the state of
Delaware  in  1964,  commenced business operations through a predecessor in
1936.    Canal  was a wholly owned subsidiary of Canal-Randolph Corporation
until  June  1,  1984,  when  Canal-Randolph Corporation distributed to its
stockholders all of the outstanding shares of Canal s common stock, under a
plan of complete liquidation.

     Canal  is  engaged  in two distinct businesses - the management of its
agribusiness  related real estate properties located in the Midwest and art
operations, consisting mainly of the acquisition of art for resale.

     While  the  Company is currently operating as a going concern, certain
significant  factors raise substantial doubt about the Company s ability to
continue  as  a  going  concern.  The Company has suffered recurring losses
from operations in eight of the last ten years.  The accompanying financial
statements  do  not  include any adjustments relating to the recoverability
a n d   classification  of  recorded  asset  amounts  or  the  amounts  and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

     Canal  continues  to  closely  monitor  and  reduce where possible its
overhead  expenses  and  plans  to  continue to reduce the level of its art
inventories  to  enhance  current cash flows.  Management believes that its
income  from  operations combined with its cost cutting program and planned
reduction  of  its  art  inventory  will  enable  it to finance its current
business  activities.   There can, however, be no assurance that Canal will
be  able  to  effectuate  its  planned art inventory reductions or that its
income  from  operations  combined  with its cost cutting program in itself
will be sufficient to fund operating cash requirements.



2.   Reclassification


     Certain  prior  year  amounts have been reclassified to conform to the
current year s presentation.





                                     10



3.   Interim Financial Statements

     The  interim  consolidated  financial  statements included herein have
been  prepared  by  Canal without audit.  In the opinion of Management, the
a c c o mpanying  unaudited  financial  statements  of  Canal  contain  all
adjustments  necessary to present fairly its financial position as of April
30, 1999 and the results of its operations and its cash flows for the three
month period ended April 30, 1999.  All of the above referenced adjustments
were  of  a  normal  recurring  nature.    Certain information and footnote
d i s closures  normally  included  in  financial  statements  prepared  in
a c cordance  with  generally  accepted  accounting  principles  have  been
condensed  or  omitted.    These  financial  statements  should  be read in
conjunction  with the consolidated financial statements for the three years
ended October 31, 1998 and the notes thereto which are contained in Canal s


1998  Annual Report on Form 10-K.  The results of operations for the period
presented  is  not necessarily indicative of the results to be expected for
the remainder of fiscal 1999.


4.   Property and Equipment

     Included  in  property  and  equipment  were  the cost of buildings of
approximately $2.5 million at April 30, 1999 and October 31, 1998.


5.   Notes Receivable

     Included in the notes and accounts receivable were the current portion
of  notes from real estate sales in the amount of $15,000 at April 30, 1999
and October 31, 1998.


6.   INVESTMENTS AVAILABLE FOR SALE

     At  April 30, 1999 the investments available for sale consisted of the
following:


                                              April 30,      October 31,
     ($ 000's Omitted)                          1999             1998

     Aggregate market value.................   $  361           $  278

     Aggregate carrying value...............   $  361           $  278



     Canal  has an investment in a company in which it, together with other
affiliated  entities,  comprise  a reporting group for regulatory purposes.
It  is  important    to  note  that it is the group  (as defined)  that can
exercise


                                     11



influence  over this company, not Canal.  Accordingly, this investment does
not qualify for consolidation as a method of reporting.  Certain of Canal s
officers  and  directors  also  serve  as officers and/or directors of this
company.    This  investment  (in  which  Canal  s  ownership  interest  is
approximately  2%)  is  carried  at  market value and the realized gains or
losses,  if any, are recognized in operating results.  Any unrealized gains
or losses are reflected in Stockholders Equity.

     For the six months ended April 30, 1999 Canal recognized an unrealized
gain on investments available for sale of $83,000.  Additionally, in fiscal
1998  Canal recognized an unrealized loss on investments available for sale
of   $873,000,  both  of  which  are  shown  in  a  separate  component  of
Stockholders Equity.


7.   ART OPERATIONS


     Canal  established  its  art operations in October 1988 by acquiring a
significant  inventory for resale of antiquities primarily from the ancient
Mediterranean   cultures.    In  November  1989,  Canal  expanded  its  art
operations by entering into a cost and revenue sharing agreement with a New
York  City  gallery  for  the  exclusive representation of Jules Olitski, a
world renowned artist of contemporary paintings.  As part of this agreement
Canal  purchased  a  number  of Olitski paintings which it holds for resale
with  a  book  value  of  approximately  $692,000  at  April 30, 1999.  The
representation  agreement  expired  December 1, 1994 and Canal now operates
independently in the marketing of its contemporary art inventory.

     Due  to  general  economic  conditions  and  the  softness  of the art
markets,  Canal  has  not  purchased  inventory in several years.  However,
Canal  continues  its  marketing efforts to sell its existing art inventory
through various consignment agreements and at public auctions.  Antiquities
and  contemporary art represented 44% ($542,758) and 56% ($692,149) and 49%
($713,862)  and 51% ($735,263) of total art inventory at April 30, 1999 and
October  31, 1998, respectively.  Substantially all of the contemporary art
inventory held for resale is comprised of the work of Jules Olitski.

       Management estimates it may take two to five years to dispose of its
current  art  inventory.    The  Company  s  ability  to dispose of its art
inventory  is  dependent  at least in part, on general economic conditions,
including  supply, demand, international monetary conditions and inflation.
Additionally,  the  art  market  itself  is very competitive.  Accordingly,
there can be no assurance that Canal will be successful in disposing of its
art inventory within the time frame discussed above.

        Canal  has  its art inventory appraised by an independent appraiser
annually.    The  1998 appraisal covered approximately 50% of the inventory
value.    The  appraised  values  estimate the current market value of each
piece giving consideration to Canal s practices of engaging in consignment,
private



                                     12





and public auction sales.  The net realizable value of the remaining 50% of
the  inventory  was  estimated  by  management  based  in part on operating
history  and in part on the results of the independent appraisals done.  In
fiscal 1998 Canal recognized a $550,000 valuation allowance against its art
inventory,  thereby, increasing the total valuation allowance to $3,400,000
as  of October 31, 1998 as compared to $2,850,000 and $2,500,000 at October
31, 1997 and 1996, respectively.  These estimates were based in part on the
Company  s  history  of  losses  sustained  on art sales in the current and
previous years.

     As   of  October  31,  1998  the  valuation  allowance  of  $3,400,000
represented  a  70%  reduction  in  the carrying value of the Company s art
inventory  which      management  believes  approximates its net realizable
value.    Accordingly,  the  Company  will, on a prospective basis, use the
adjusted  carrying value for sales, thereby, reducing the valuation reserve
(proportionately)  as  the  inventory  is  sold.  This policy resulted in a
reduction  in  the  valuation allowance of $621,000 on sales of art with an
historic cost of $839,000 in the first six months of fiscal 1999.


     The Company s plan to sell inventory at auction is contemplated in the
normal  course  of  business.   Auction in this context is one of the usual
channels  used  for disposal of its art inventory.  The proceeds from these
sales  will  be  used  to  reduce the Company s outstanding debt.  If these
sales are not made, the Company has alternate means of raising cash such as
sales  of  investments,  sale  of  real  estate, raising of new capital and
rescheduling of debt.  Some of these measures were successfully implemented
in fiscal 1998.

     Canal  s art operations have generated operating losses of $54,000 and
$195,000  (net  of  decreases  in  the  valuation allowance of $621,000 and
$380,000  for  the  six  month  periods  ended  April  30,  1999  and 1998,
respectively) on revenues of $186,000 and $206,000 for the six months ended
April  30, 1999 and 1998, respectively.   Art sales have resulted primarily
through  activities  in  conjunction  with  sales  of antiquities.  Canal s
management  believes  that  through  its  consignment agreements as well as
other  potential  distribution  outlets  Canal  will  continue  to  deal in
antiquities and contemporary art.



     Inventory  on  Consignment - The Company had approximately $214,000 of
art inventory on consignment with third party dealers at April 30, 1999 and
October 31, 1998, respectively.








                                     13






8. BORROWINGS

     At  April  30, 1999, substantially all of Canal s real properties, the
stock of certain subsidiaries, the investments and a substantial portion of
its  art  inventories  are  pledged  as  collateral to secure the following
obligations:


                                            April 30,       October 31,
                                              1999            1998
                                          (Unaudited)        (Audited)
(Thousands of Dollars)

Variable rate mortgage notes due
 May 15, 2001 - related party............    $   300         $ 2,846


11% mortgage note; original principal
 amount $1,697; due April 1, 2011;
 payable in monthly installments
 (including interest) of $14..............     1,183           1,210



9.5% mortgage note; original principal
 amount $472; due November 1, 2012,
 payable in monthly installments
 (including interest) of $5...............       386             393


10 1/2% mortgage note (adjusted
 periodically to prime plus 1 3/4%);
 original principal amount $556 due
 January 15, 2013; payable in monthly
 installments (including interest) of $6..       461             466


Other Note................................       319             362



Total ....................................     2,649           5,277

Less -- current maturities ...............       110             110



Long-term debt ...........................   $ 2,539         $ 5,167



                                     14




     On  January  8,  1998,  the Company issued $3,700,000 of variable rate
mortgage  notes  due May 15, 2001, the proceeds of which were used to repay
in  full  the  Company  s  variable  rate  mortgage  notes due May 15, 1998
($2,605,000),  its  variable  rate  mortgage  notes  due September 15, 1998
($700,000)  and  two notes which were due December 31, 1997 ($320,000) plus
accrued  interest  thereon.  The purchasers of these notes included certain
entities  controlled  by  the  Company  s  Chairman,  the  Company  s Chief
Executive    Officer  and  members  of  their  families.  The variable rate
mortgage notes issued have essentially the same terms and conditions as the
variable rate mortgage notes which were repaid.  These notes carry interest
at  the  highest  of  four variable rates, determined on a quarterly basis.
These   notes,  among  other  things,  prohibits  Canal  from  becoming  an
investment  company  as  defined  by  the  Investment  Company Act of 1940;
requires  Canal to maintain minimum net worth; restricts Canal s ability to
pay  cash  dividends or repurchase stock; requires principal prepayments to
be  made  only  out  of  the  proceeds  from the sale of certain assets and
requires  the  accrual  of  additional interest (to be paid at maturity) of
approximately  three  percent per annum.  At April 30, 1999 the balance due
under these notes was $300,000.



9.   VALUATION RESERVE

     The  valuation reserve represents the excess of the additional minimum
pension  liability  required  under  the provisions of SFAS No. 87 over the
unrecognized  prior  service  costs  of  former  stockyard employees.  Such
excess  arose  due  to  the  decline  in the market value of pension assets
available  for the pension benefits of the former employees, which benefits
were frozen at
the  time  the  stockyard  operations  were  sold in 1989.  The excess will
effectively  be  expensed  over  time  as  actuarial computations of annual
pension    cost  (made  in  accordance  with  SFAS  No.  87)  recognize the
deficiency that exists.




















                                    15




                    Management s Discussion and Analysis
              Of Results of Operations and Financial Condition
                  For the Six Months Ended April 30, 1999



Results of Operations - General


     While  the  Company is currently operating as a going concern, certain
significant  factors raise substantial doubt about the Company s ability to
continue  as  a  going  concern.  The Company has suffered recurring losses
from  operations in eight of the last ten years. The accompanying financial
statements  do  not  include any adjustments relating to the recoverability
a n d   classification  of  recorded  asset  amounts  or  the  amounts  and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.


     Canal  recognized  net income of $1,334,000 and $1,474,000 for the six
and  three  month periods ended April 30, 1999 as compared to net losses of
$429,000  and  $103,000  for  the  same  periods  in  fiscal  1998.   After
recognition of unrealized gains on investments held for sale of $83,000 and
$141,000  for  the  six  and  three  month periods ended April 30, 1999 the
Company  recognized   comprehensive income of $1,417,000 and $1,615,000 for
the  six  and  three  month  periods  ended  April  30, 1999 as compared to
comprehensive  losses  of  $767,000  and  $396,000  for the same periods in
fiscal  1998.    Further,  after  recognition  of  preferred stock dividend
payments  of  $96,000 and $48,000 for the six and three month periods ended
April  30,  1999,  the  Company  recognized  income  applicable  to  common
stockholders  of  $1,321,000 ($0.31 per common share) and $1,566,000 ($0.36
per  common  share)for the six and three month periods ended April 30, 1999
as  compared to losses applicable to common stockholders of $863,000 ($0.20
per common share)and $444,000 ($0.10 per common share) for the same periods
in  fiscal  1998.  Included  in the 1999 results are gains of approximately
$1,655,000  on  sales  from  real  estate  offset  to a certain extent by a
$54,000  loss  from  real  estate  operations.  The 1998 results included a
$339,000  unrealized  loss on investments held for sale and a $195,000 loss
from art operations.


     Canal  s  revenues from continuing operations consist of revenues from
its  real estate and art operations. Due to general economic conditions and
more  specifically  a  depressed  national  art  market,  Canal s aggregate
revenues  from  art  sales  and  the  prices  at which sales were made have
significantly declined in recent years. Revenues increased by $2,603,000 or
151.9%  to $4,317,000 and by $2,673,000 or 293.5% to $3,584,000 for the six
and  three  month periods ended April 30, 1999, as compared to the revenues
for the same periods in fiscal 1998.  The 1999 increase is due primarily to
a  $2,850,000  increase from the sale of real estate which included Canal s
sale  of  the St. Paul, Minnesota stockyard property which had been part of
the stockyards master lease.

                                     16




Capital Resources and Liquidity

     While  the  Company is currently operating as a going concern, certain
significant  factors raise substantial doubt about the Company s ability to
continue  as  a  going  concern.  The Company has suffered recurring losses
from operations in eight of the last ten years.  The accompanying financial
statements  do  not  include any adjustments relating to the recoverability
a n d   classification  of  recorded  asset  amounts  or  the  amounts  and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

     On  January  8,  1998,  the Company issued $3,700,000 of variable rate
mortgage  notes  due May 15, 2001, the proceeds of which were used to repay
in  full  the  Company  s  variable  rate  mortgage  notes due May 15, 1998
($2,605,000),  its  variable  rate  mortgage  notes  due September 15, 1998
($700,000)  and  two notes which were due December 31, 1997 ($320,000) plus
accrued  interest  thereon.  The purchasers of these notes included certain
entities  controlled  by  the  Company  s  Chairman,  the  Company  s Chief
Executive    Officer  and  members  of  their  families.  The variable rate
mortgage notes issued have essentially the same terms and conditions as the
variable rate mortgage notes which were repaid.  These notes carry interest
at  the  highest  of  four variable rates, determined on a quarterly basis.
These   notes,  among  other  things,  prohibits  Canal  from  becoming  an
investment  company  as  defined  by  the  Investment  Company Act of 1940;
requires  Canal to maintain minimum net worth; restricts Canal s ability to
pay  cash  dividends or repurchase stock; requires principal prepayments to
be  made  only  out  of  the  proceeds  from the sale of certain assets and
requires  the  accrual  of  additional interest (to be paid at maturity) of
approximately  three  percent per annum.  At April 30, 1999 the balance due
under these notes was $300,000.


     Cash  and  cash  equivalents  of  $107,000 at April 30, 1999 increased
$71,000  from  $36,000 at October 31, 1998.  Net cash used by operations so
far  in  fiscal  1999  was  $388,000.    Substantially  all of the 1999 net
proceeds from the sale of real estate and the proceeds from the sale of art
was used to reduce outstanding debt and accrued expenses.

     During  fiscal  1999 Canal reduced its variable rate mortgage notes by
$2,546,000  and  other  long-term  debt  by  $82,000  for  a  net 1999 debt
reduction of $2,628,000.

     At  April  30, 1999 the Company s current liabilities exceeded current
assets  by  $0.6  million,  as compared to current assets exceeding current
liabilities  by  $1.0  million  at  October  31,  1998.   The only required
principal  repayments under Canal s debt agreements for fiscal 1999 will be
from  the proceeds of the sale of certain assets (if any) and approximately
$0.1 million on various fixed mortgages.






                                     17




     Canal  continues  to  closely  monitor  and  reduce where possible its
overhead  expenses  and  plans  to  continue to reduce the level of its art
inventories  to  enhance  current cash flows.  Management believes that its
income  from  operations combined with its cost cutting program and planned
reduction  of  its  art  inventory  will  enable  it to finance its current
business  activities.   There can, however, be no assurance that Canal will
be  able  to  effectuate  its  planned art inventory reductions or that its
income  from  operations  combined  with its cost cutting program in itself
will be sufficient to fund operating cash requirements.



Real Estate Revenues

     Real  estate  revenues  for  the  six  months  ended April 30, 1999 of
$4,131,000  accounted for 95.7% of the year to date revenues as compared to
real  estate  revenues  of $1,508,000 or 88.0% for the same period in 1998.
Real  estate revenues are comprised of rental income from Exchange Building
(commercial office space) rentals and other lease income from the rental of
vacant  land  and certain structures (12.6% and 48.1%), ground lease income
(10.6%  and  30.6%), volume based rental income (0.5% and 4.3%) and sale of
real  estate  and  other  income (76.3% and 17.0%) for the six months ended
April  30,  1999  and 1998, respectively.  The 1999 revenue increase is due
primarily to a $2,894,000 increase in revenues from the sale of real estate
offset  by  a  reduction  in  rental  incomes of $273,000.  The decrease in
rental  income  is  due primarily to the closing of the Fargo, North Dakota
packing  plant,  as well as the continued consolidation of other stockyards
related  tenants.    The  changes  in  percentages  in  the  year  to  year
comparisons  are  due  primarily to the significant increase in real estate
sales for fiscal 1999.

     Real  estate  revenues  for  the  three months ended April 30, 1999 of
3,560,000 accounted for 99.3% of the second quarter revenues as compared to
real  estate  revenues  of  $863,000  or 94.7% for the same period in 1998.
Real  estate revenues are comprised of rental income from Exchange Building
(commercial office space) rentals and other lease income from the rental of
vacant  land  and  certain structures (7.4% and 42.2%), ground lease income
(5.8%  and  26.8%),  volume based rental income (0.0% and 3.6%) and sale of
real  estate  and other income (86.8% and 27.4%) for the three months ended
April  30,  1999  and  1998, respectively. The percentage variations in the
year  to  year comparisons are due primarily to the increase in real estate
sales for fiscal 1999.



Real Estate Expenses

     Real  estate  expenses  for  the  six  months  ended April 30, 1999 of
$1,925,000  increased  by  $1,168,000  (154.4%)  from $756,000 for the same
period  in  1998.   Real estate expenses were comprised of labor, operating
and maintenance  (10.7% and 58.0%),  depreciation  and  amortization  (5.0%
and


                                     18






14.7%), taxes other than income taxes (4.9% and 13.3%), cost of real estate
sold  (77.4%  and  7.9%)  and general and administrative expenses (2.0% and
6.1%)  for the six months ended April 30, 1999 and 1998, respectively.  The
1999  increase  in  real estate expenses is due primarily to the $1,430,000
increase  in  cost of real estate sales.  The percentage variations in year
to  year  comparison  is  also due primarily to the decrease in the cost of
real estate sold for fiscal 1999.

     Real  estate  expenses  for  the  three months ended April 30, 1999 of
$1,667,000  increased  by  $1,259,000  (308.6%)  from $408,000 for the same
period  in  1999.   Real estate expenses were comprised of labor, operating
and  maintenance  (6.4% and 55.3%), depreciation and amortization (2.7% and
13.7%), taxes other than income taxes (2.8% and 12.4%), cost of real estate
sold  (86.8%  and  13.0%) and general and administrative expenses (1.3% and
5.6%) for the three months ended April 30, 1999 and 1998, respectively. The
percentage  variations  in  year  to  year  comparisons are also due to the
increase in the cost of real estate sold for fiscal 1999.



Art Operations

       Management estimates it may take two to five years to dispose of its
current  art  inventory.    The  Company  s  ability  to dispose of its art
inventory  is  dependent  at least in part, on general economic conditions,
including  supply, demand, international monetary conditions and inflation.
Additionally,   the  art  market  itself  is  a  very  competitive  market.
Accordingly,  there  can  be  no assurance that Canal will be successful in
disposing of its art inventory within the time frame discussed above.


     Canal  has  its  art  inventory  appraised by an independent appraiser
annually.   The  fiscal  1998  appraisal  covered  approximately 50% of the
inventory value.  The appraised values estimate the current market value of
each  piece  giving  consideration  to  Canal s  practices  of  engaging in
consignment, private and public auction sales.  The net realizable value of
the  remaining  50%  of  the inventory was estimated by management based in
part  on  operating  history  and in part on the results of the independent
appraisals  done.    In  fiscal  1998 Canal recognized a $550,000 valuation
allowance  against  its  art inventory, thereby, increasing the total value
allowance  to  $3,400,000 as of October 31, 1998 compared to $2,850,000 and
$2,500,000 at October 31, 1997 and 1996, respectively.  These estimates are
based  in part on the Company s history of losses sustained on art sales in
the current and previous years.






                                     19



     As   of  October  31,  1998  the  valuation  allowance  of  $3,400,000
represented  a  70%  reduction  in  the carrying value of the Company s art
inventory    which    management  believes  approximates its net realizable
value.    Accordingly,  the  Company  will, on a prospective basis, use the
adjusted  carrying  value  for  the  cost  of  sales, thereby, reducing the
valuation  reserve (proportionately) as the inventory is sold.  This policy
resulted  in  a first half reduction in the valuation allowance of $621,000
on sales of art with an historic cost of $839,000.


     The Company s plan to sell inventory at auction is contemplated in the
normal  course  of  business.   Auction in this context is one of the usual
channels  used  by  the  Company  for  disposal  of its art inventory.  The
proceeds
from  these  sales  are  used  to reduce the Company s outstanding debt and
finance  current  operations.   If these sales are not made the Company has
alternate  means of raising cash such as sales of investments, sale of real
estate,  raising  of new capital and further rescheduling of debt.  Some of
these measures were successfully implemented in fiscal 1998.


Art Revenues

     Art  revenues  for  the  six  months  ended April 30, 1999 of $186,000
decreased  $20,000 from $206,000 for the same period in 1998.  Art revenues
are comprised of proceeds from the sale of antiquities and contemporary art
(100.0%  and  100.0%)  and  commission income on sale of art owned by third
parties  (0.0% and 0.0%) for the six month periods ended April 30, 1999 and
1998,  respectively.  The Company s art inventory was reduced through sales
by $839,000 in the first half of fiscal 1999.


     Art  revenues  for  the  three  months ended April 30, 1999 of $24,000
decreased  $24,000  from $48,000 for the same period in 1998.  Art revenues
are comprised of proceeds from the sale of antiquities and contemporary art
(100.0% and 100.0%) and commission income on the sale of art owned by third
parties  (0.0%  and  0.0%) for the three month periods ended April 30, 1999
and 1998, respectively.




Art Expenses

     Art  expenses  for  the  six  months  ended April 30, 1999 of $240,000
decreased  by  $162,000  from  $402,000  for  the same period in 1998.  Art
expenses  (net  of  a  valuation  allowance  of  $621,000  in  fiscal 1999)
consisted  of  the  cost of art sold (90.7% and 95.0%) and selling, general
and administrative expenses (9.3% and 5.0%) for the six month periods ended
April 30, 1999 and 1998, respectively.




                                     20



     Art  expenses  for  the  three  months ended April 30, 1999 of $49,000
decreased  by  $63,000  from  $112,000  for  the  same period in 1998.  Art
expenses  consisted of the cost of art sold (net of valuation allowances of
$88,000  and  $100,000 for the three month periods ended April 30, 1999 and
1 9 9 8 ,   respectively)  (77.2%  and  91.0%)  and  selling,  general  and
administrative  expenses (22.8% and 9.0%) for the three month periods ended
April  30,  1999 and 1998, respectively.  It is the Company s policy to use
the  adjusted  carrying  value  for  sales,  thereby reducing the valuation
reserve proportionately as the inventory is sold.



General and Administrative

     General and administrative expenses for the six months ended April 30,
1999 of $516,000 decreased $47,000 (8.4%) from $563,000 for the same period
in  1998.   The major components of general and administrative expenses are
officers  salaries  (41.8%  and  38.3%)  rent  (5.7%  and  8.6%), legal and
professional  fees (7.0% and 8.5%), insurance (11.6% and 12.3%), and office
salaries  (10.8%  and  9.9%) for the six month periods ended April 30, 1999
and    1998,  respectively.    The  percentage  changes in the year to year
comparisons  are  due  primarily  to  the aggregate decrease in general and
administrative expenses in fiscal 1998.

     General  and  administrative expenses for the three months ended April
30,  1999  of $253,000 decreased $31,000 (10.9%) from $284,000 for the same
period  in  1999.    The  major  components  of  general and administrative
expenses  are  officers  salaries  (42.5% and 37.9%), rent (1.9% and 8.4%),
legal  and  professional  fees (7.1% and 8.4%), insurance (11.8% and 12.1%)
and  office  salaries  (11.0%  and  9.8%) for the three month periods ended
April 30, 1999 and 1998, respectively.



Interest and Other Income

     Interest  and  other  income  for  the six months ended April 30, 1999
increased to $10,000 from $1,000 for the same period in 1998.  Interest and
other  income for the three months ended April 30, 1999 of $4,000 increased
$3,000  from $1,000 for the same period in 1998.  Interest and other income
is comprised primarily of interest income.












                                     21




Interest Expense

     Interest  expense  for  the  six months ended April 30, 1999 decreased
26.3% to $312,000 as compared to $423,000 for the same period in 1998.  The
1999 decrease is due primarily to a reduction in aggregate debt outstanding
at  April  30,  1999  as compared to the same period in 1998.  For the most
part interest rates on Canal s debt have remained unchanged for the past 12
months.

     Interest  expense  for the three months ended April 30, 1999 decreased
31.3%  to $143,000 as compared to $209,000 for the same period in 1998. The
1999   decrease  is  due  primarily  to  the  decrease  in  aggregate  debt
outstanding.









                                     22























                                  PART II

                             OTHER INFORMATION




                                     23






Item 1:        Legal Proceedings:

               See Item 3 of Canal s October 31, 1998 Form 10-K.

Item 2 and 3:

               Not applicable.

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

               None.

Item 5:        Other Information:

               None.

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

               (A) Not applicable.
               (b)  No  reports  on  Form  8-K  have  been filed during the
               quarter
                   for which the report is filed.



























                                     24




                                 SIGNATURES



          Pursuant  to  the  requirement  of the Securities Exchange Act of
1934, the registrant had duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.




                                        Canal Capital Corporation
                                              Registrant




                                        /s/ Reginald Schauder
                                        Reginald Schauder
                                        Vice President-Finance &
                                        Chief Financial Officer




Date: June 11, 1999


























                                     25