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 July 31, 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 August 31, 1999
Common stock, $0.01 par value                4,326,929

(This document contains 24 pages)


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

                                   JULY 31,          OCTOBER 31,
                                     1999                1998
                                 (UNAUDITED)           (AUDITED)

ASSETS:
CURRENT ASSETS:

 CASH AND CASH EQUIVALENTS          $   476,922        $     33,538
 NOTES AND ACCOUNTS RECEIVABLE          211,353             211,070
 ART INVENTORY, NET OF A VALUATION ALLOWANCE OF
 $ 1,500,000  AT JULY 31, 1999 AND
 OCTOBER 31, 1998, RESPECTIVELY         500,000             500,000
 INVESTMENTS                            270,950             278,175
 PREPAID EXPENSES                       226,387             173,938

  TOTAL CURRENT ASSETS                1,685,612           1,196,721




NON-CURRENT ASSETS:

 PROPERTY ON OPERATING LEASES, NET OF
 ACCUMULATED DEPRECIATION OF $1,417,251
 AND $ 1,671,222 AT JULY 31, 1999 AND
 OCTOBER 31, 1998, RESPECTIVELY        4,814,515           5,861,064


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





OTHER ASSETS:

 PROPERTY HELD FOR DEV.OR RESALE       1,044,695           1,318,095
 DEFERRED LEASING AND FINANCING COSTS     12,102              12,866
 DEPOSITS AND OTHER                      120,402             169,578

                                       1,177,199           1,500,539

                                     $ 8,412,233         $ 9,507,449
                                    ============         ===========




                                     2


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

                                       JULY 31,       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    1,310,338          2,061,210
 INCOME TAXES PAYABLE                   10,444             14,314

  TOTAL CURRENT LIABILITIES          1,430,782          2,185,524

LONG-TERM DEBT, LESS CURRENT PORTION 2,217,937          2,321,433
LONG-TERM DEBT, LESS
 CURRENT PORTION-RELATED PARTY       1,199,082          2,846,000

                                     3,417,019          5,167,433
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
PREFERRED STOCK, $0.01 PAR VALUE:
 5,000,000 SHARES AUTHORIZED; 3,878,758 AND
 3,411,681 SHARES ISSUED AND OUTSTANDING
 AT JULY 31, 1999 AND OCTOBER 31, 1998,
 RESPECTIVELY AND AGGREGATE LIQUIDATION
 PREFERENCE OF $ 38,787,580 AND $ 34,116,810
 AT JULY 31, 1999 AND OCTOBER 31, 1998
 RESPECTIVELY                            38,793              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 JULY 31, 1999 AND OCTOBER 31, 1998,
 RESPECTIVELY                            53,138              53,138

PAID-IN CAPITAL                      27,217,159          27,033,046

RETAINED EARNINGS (DEFICIT)         (10,579,667)        (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                            (264,608)           (257,383)

                                      3,564,432           2,154,492

                                   $  8,412,233        $  9,507,449
                                  =============       =============




                                    3



               CANAL CAPITAL CORPORATION & SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
           FOR THE THREE MONTHS ENDED JULY 31, 1999 AND 1998


                                        1999            1998
                                    (UNAUDITED)     (UNAUDITED)

REAL ESTATE OPERATIONS:
 REAL ESTATE REVENUES:
 SALE OF REAL ESTATE               $   423,000     $   283,439
 RENTAL INCOME                         231,775         346,025
 GROUND LEASE INCOME                   161,600         231,000
 VOLUME BASED RENTAL INCOME                  0          30,903
 OTHER INCOME                            4,983         376,794

                                       821,358       1,268,161

 REAL ESTATE EXPENSES:
 COST OF REAL ESTATE SOLD              200,694         150,680
 LABOR, OPERATING AND MAINTENANCE      122,147         208,927
 DEPRECIATION AND AMORTIZATION          29,590          53,087
 TAXES OTHER THAN INCOME TAXES          46,800          50,400
 GENERAL AND ADMINISTRATIVE             20,919          22,191

                                       420,150         485,285



INCOME FROM REAL ESTATE OPERATIONS     401,208         782,876


ART OPERATIONS:
 ART REVENUES:
  SALES                                      0               0
  OTHER REVENUES                             0               0

                                             0               0

 ART EXPENSES:
  COST OF ART SOLD                         740               0
  VALUATION RESERVE                          0               0
  SELLING, GENERAL AND ADMINISTRATIVE   10,529           9,770

                                        11,269           9,770


LOSS FROM ART OPERATIONS               (11,269)         (9,770)






                                     6


          CANAL CAPITAL CORPORATION & SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
       FOR THE THREE MONTHS ENDED JULY 31, 1999 AND 1998
                       Continued ...


                                         1999           1998
                                     (UNAUDITED)     (UNAUDITED)

GENERAL AND ADMINISTRATIVE EXPENSE  $  (244,132)     $  (283,281)


INCOME (LOSS) FROM OPERATIONS           145,807          489,825

OTHER INCOME (EXPENSE):
 INTEREST & OTHER INCOME                  1,010                2
 INTEREST EXPENSE                       (60,212)         (64,571)
 INTEREST EXPENSE-RELATED PARTY         (14,000)        (129,000)
 OTHER EXPENSE                                0                0

                                        (73,202)        (193,569)


(LOSS) GAIN BEFORE PROVISION FOR INCOME
  TAXES                                  72,605          296,256

PROVISION (BENEFIT) FOR INCOME TAXES          0                0

NET (LOSS)                               72,605          296,256



OTHER COMPREHENSIVE INCOME (LOSS):

 UNREALIZED LOSS ON INVESTMENTS
 AVAILABLE FOR SALE                     (90,317)        (361,267)



COMPREHENSIVE INCOME (LOSS)         $   (17,712)    $    (65,011)
                                    =============    ============


INCOME (LOSS) PER COMMON SHARE     $      (0.02)    $      (0.03)
                                    =============    ============









                                7


                 CANAL CAPITAL CORPORATION & SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
              FOR THE NINE MONTHS ENDED JULY 31, 1999 AND 1998


                                        1999            1998
                                    (UNAUDITED)     (UNAUDITED)

REAL ESTATE OPERATIONS:
 REAL ESTATE REVENUES:
 SALE OF REAL ESTATE                 $ 3,568,000     $   534,439
 RENTAL INCOME                           751,780       1,071,870
 GROUND LEASE INCOME                     600,400         693,000
 VOLUME BASED RENTAL INCOME               21,645          96,394
 OTHER INCOME                             10,391         380,532

                                       4,952,216       2,776,235

REAL ESTATE EXPENSES:
 COST OF REAL ESTATE SOLD              1,690,796         210,751
 LABOR, OPERATING AND MAINTENANCE        327,200         647,663
 DEPRECIATION AND AMORTIZATION           126,242         164,406
 TAXES OTHER THAN INCOME TAXES           141,193         151,200
 GENERAL AND ADMINISTRATIVE               59,459          67,703

                                       2,344,890       1,241,723



INCOME FROM REAL ESTATE OPERATIONS     2,607,326       1,534,512


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

                                         186,400         206,200

 ART EXPENSES:
 COST OF ART SOLD                        839,986         761,453
 VALUATION RESERVE                      (621,300)       (380,000)
 SELLING, GENERAL AND ADMINISTRATIVE      32,762          29,884

                                         251,448         411,337


LOSS FROM ART OPERATIONS                 (65,048)       (205,137)





                                   4


              CANAL CAPITAL CORPORATION & SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
           FOR THE NINE MONTHS ENDED JULY 31, 1999 AND 1998
                           Continued ...


                                        1999           1998
                                    (UNAUDITED)     (UNAUDITED)

GENERAL AND ADMINISTRATIVE EXPENSE $  (760,119)     $  (846,310)


INCOME (LOSS) FROM OPERATIONS        1,782,159          483,065

OTHER INCOME (EXPENSE):
 INTEREST & OTHER INCOME               10,514              933
 INTEREST EXPENSE                    (184,148)        (285,634)
 INTEREST EXPENSE-RELATED PARTY      (202,000)        (331,000)
 OTHER EXPENSE                              0                0

                                     (375,634)        (615,701)


(LOSS) GAIN BEFORE PROVISION FOR INCOME
  TAXES                             1,406,525         (132,636)

PROVISION (BENEFIT) FOR INCOME TAXES        0                0

NET (LOSS)                          1,406,525         (132,636)



OTHER COMPREHENSIVE INCOME (LOSS):

  UNREALIZED LOSS ON INVESTMENTS
  AVAILABLE FOR SALE                   (7,225)        (699,774)



COMPREHENSIVE INCOME (LOSS)       $ 1,399,300     $   (832,410)
                                 =============    ============


INCOME (LOSS) PER COMMON SHARE   $       0.28     $      (0.23)
                                 =============    ============








                                     5


            CANAL CAPITAL CORPORATION & SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED JULY 31, 1999 AND 1998

                                    1999              1998
                                 (UNAUDITED)       (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
 NET INCOME (LOSS)                 $ 1,406,525     $  (132,636)

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

 PROVISION FOR LITIGATION SETTLEMENT          0                0
 DEPRECIATION AND AMORTIZATION          137,289          182,127
 GAIN  ON SALES OF REAL ESTATE       (1,877,204)        (323,688)

CHANGES IN ASSETS AND LIABILITIES:
 NOTES AND ACCOUNTS RECEIVABLES, NET       (283)        (451,354)
 ART INVENTORY, NET                     214,218          380,294
 PREPAID EXPENSES AND OTHER, NET       (268,590)          20,623
 PAYABLES AND ACCRUED EXPENSES, NET    (754,742)          74,758
NET CASH (USED) PROVIDED
    BY OPERATING ACTIVITIES          (1,142,787)        (249,876)

CASH FLOWS FROM INVESTING ACTIVITIES:
 PROCEEDS FROM SALES OF REAL ESTATE   3,568,000          534,439
 PROCEEDS FROM SALE OF INVESTMENTS            0                0
 CAPITAL EXPENDITURES                  (231,235)         (51,531)
NET CASH PROVIDED BY
  INVESTING ACTIVITIES                3,336,765          482,908

CASH FLOWS FROM FINANCING ACTIVITIES:
 PROCEEDS FROM LONG-TERM DEBT-RELATED
  PARTIES                               525,000           75,000
 TRANSFERS TO LONG-TERM                 337,082                0
 REPAYMENT OF LONG-TERM
  DEBT OBLIGATIONS                   (2,612,496)        (352,558)
NET CASH USED BY
  FINANCING ACTIVITIES               (1,750,414)        (277,558)

NET (DECREASE) INCREASE IN CASH AND CASH
  EQUIVALENTS                           443,564          (44,526)
CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR                   33,358           28,225

CASH AND CASH EQUIVALENTS
  AT END OF YEAR                    $   476,922     $    (16,301)
                                    ============     ============


NOTE:    Canal  made  federal  and state income tax payments of $20,000 and
$17,000  and  interest  payments of $386,000 and $617,000 in the nine month
periods ended July 31, 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 NINE MONTHS ENDED JULY 31, 1999 (UNAUDITED)


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

BALANCE,10/31/97 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
                --------------------   ---------------------  -----------

BALANCE,10/31/98 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      467,077      4,676      184,113
 MINIMUM PEN. LIAB. ADJ  0         0            0          0            0
 UNREALIZED GAIN ON INV  0         0            0          0            0
                --------------------   ---------------------   ----------

BALANCE,07/31/99 5,313,794   $53,138    3,878,758    $38,793  $27,217,159
                ====================   ===================== ============




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

BALANCE,10/31/97($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
               -------------  -------------   ------------  ------------

BALANCE,10/31/98 (11,808,043)    ($1,896,838)      (257,383)  (11,003,545)
NET INCOME (LOSS)  1,406,525               0              0             0
PREFERRED STOCK DIV (178,149)              0              0             0
MINIMUM PEN. LIAB. ADJ.    0               0              0             0
UNREALIZED GAIN ON INV.    0               0         (7,225)            0
               -------------  --------------   ------------ ------------

BALANCE,07/31/99($10,579,667)    ($1,896,838)   $  (264,608) ($11,003,545)
               =============  ==============  ============= =============


                                     9


                 CANAL CAPITAL CORPORATION AND SUBSIDIARIES
               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                      NINE MONTHS ENDED JULY 31, 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 July
31,  1999 and the results of its operations and its cash flows for the nine
month  period ended July 31, 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 July 31, 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 July 31, 1999
and October 31, 1998.


6.   INVESTMENTS AVAILABLE FOR SALE

     At  July  31, 1999 the investments available for sale consisted of the
following:


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

     Aggregate market value.................   $  271           $  278

     Aggregate carrying value...............   $  271           $  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 nine months ended July 31, 1999 Canal recognized an unrealized
loss  on investments available for sale of $7,000.  Additionally, in fiscal
1998  Canal recognized an unrealized loss on investments available for sale
of   $700,000,  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  July  31, 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 July 31, 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 $840,000 in the first nine 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 $65,000 and
$205,000  (net  of  decreases  in  the  valuation allowance of $621,000 and
$380,000  for  the  nine  month  periods  ended  July  31,  1999  and 1998,
respectively)  on  revenues  of  $186,000  and $206,000 for the nine months
ended  July  31,  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 July 31, 1999 and
October 31, 1998, respectively.








                                     13






8. BORROWINGS

     At  July  31,  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:


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


Variable rate mortgage notes due
 May 15, 2003 - related party............    $ 1,199         $ 2,846


11% mortgage note; original principal
 amount $1,697; due April 1, 2011;
 payable in monthly installments
 (including interest) of $14..............     1,170           1,210


9.5% mortgage note; original principal
 amount $472; due November 1, 2012,
 payable in monthly installments
 (including interest) of $5...............       381             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..       458             466


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



Total ....................................     3,527           5,277

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



Long-term debt ...........................   $ 3,417         $ 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.  As discussed below, the balance due
these notes has been repaid in full as of July 31, 1999.

     On  July  29,  1999,  the  Company  issued  1,199,082 of variable rate
mortgage  notes  due May 15, 2003, the proceeds of which were used to repay
in  full  the  Company  s  variable  rate  mortgage  notes due May 15, 2001
(including  all additional and accrued interest thereon) and to provide the
working capital for the Company s reentry into the stockyard business.  The
purchasers  of  these  notes included the Company s Chief Executive Officer
and  members  of his family.  The variable rate mortgage notes issued carry
interest  at  a  rate  of  10% per annum.  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.    At July 31, 1999, the balance due under these
notes was $1,199,082.


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 Nine Months Ended July 31, 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 $1,407,000 and $73,000 for the nine and
three  month  periods  ended  July  31,  1999  as compared to net losses of
$133,000  and  net  income of $296,000 for the same periods in fiscal 1998.
After  recognition  of  unrealized  losses  on investments held for sale of
$7,000 and $90,000 for the nine and three month periods ended July 31, 1999
t h e  Company  recognized    comprehensive  income  of  $1,399,000  and  a
comprehensive  loss  of  $18,000 for the nine and three month periods ended
July  31,  1999 as compared to comprehensive losses of $832,000 and $65,000
for  the  same  periods  in  fiscal  1998.    Further, after recognition of
preferred  stock dividend payments of $178,000 and $82,000 for the nine and
three  month  periods  ended  July  31, 1999, the Company recognized income
applicable  to  common  stockholders of $1,221,000 ($0.28 per common share)
and  a  loss  available  to  common  shares  of  $100,000 ($0.02 per common
share)for  the nine and three month periods ended July 31, 1999 as compared
to  losses  applicable to common stockholders of $985,000 ($0.23 per common
share)and  $121,000 ($0.03 per common share) for the same periods in fiscal
1998. Included in the 1999 results are gains of approximately $1,877,000 on
sales  from  real  estate offset to a certain extent by a $65,000 loss from
real  estate  operations.   The 1998 results included a $700,000 unrealized
loss on investments held for sale and a $205,000 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 $2,156,000 or
72.3%  to $5,139,000 and decreased by $447,000 or 35.2% to $821,000 for the
nine  and  three  month  periods  ended  July  31, 1999, as compared to the
revenues for the same periods in fiscal 1998.  The 1999 nine month increase
is  due  primarily  to  a  $3,034,000 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.  The 1999 three month
decrease  is  due  primarily  to  the  inclusion  in the 1998 revenues of a
$375,000  gain on insurance proceeds to the fire at the Sioux City Exchange
Building.

                                     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.  As discussed below, the balance due
under these notes has been repaid in full as of July 31, 1999.

     On  July  29,  1999,  the  Company  issued  1,199,082 of variable rate
mortgage  notes  due May 15, 2003, the proceeds of which were used to repay
in  full  the  Company  s  variable  rate  mortgage  notes due May 15, 2001
(including  all additional and accrued interest thereon) and to provide the
working capital for the Company s reentry into the stockyard business.  The
purchasers  of  these  notes included the Company s Chief Executive Officer
and  members  of his family.  The variable rate mortgage notes issued carry
interest  at  a  rate  of  10% per annum.  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.    At July 31, 1999, the balance due under these
notes was $1,199,082.

     Cash  and  cash  equivalents  of  $477,000  at July 31, 1999 increased
$443,000  from $34,000 at October 31, 1998.  Net cash used by operations so
far  in  fiscal  1999  was  $1,143,000.   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 long-term debt by $1,750,000.

                                     17



     At  July  31,  1999  the  Company  s  current  assets exceeded current
liabilities  by  $0.2 million, as compared to current liabilities exceeding
current  assets  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.

     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  nine  months  ended July 31, 1999 of
$4,952,000  accounted for 96.4% of the year to date revenues as compared to
real  estate  revenues  of $2,776,000 or 93.1% 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 (15.7% and 38.6%), ground lease income
(12.1%  and  25.0%), volume based rental income (0.1% and 3.5%) and sale of
real  estate  and  other income (72.2% and 32.9%) for the nine months ended
July  31,  1999  and  1998, respectively.  The 1999 revenue increase is due
primarily to a $2,034,000 increase in revenues from the sale of real estate
offset  by  a  reduction  in  rental  incomes of $487,000.  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 July 31, 1999 of
$821,000  accounted for 100.0% of the third quarter revenues as compared to
real  estate  revenues of $1,268,000 or 100.0% 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 (28.2% and 27.3%), ground lease income
(19.7%  and  18.2%), volume based rental income (0.0% and 2.4%) and sale of
real  estate  and other income (52.1% and 52.1%) for the three months ended
July 31, 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.




                                     18



Real Estate Expenses

     Real  estate  expenses  for  the  nine  months  ended July 31, 1999 of
$2,345,000  increased  by  $1,103,000  (88.8%) from $1,242,000 for the same
period  in  1998.   Real estate expenses were comprised of labor, operating
and maintenance  (14.0% and 52.2%),  depreciation  and  amortization  (5.4%
and
13.2%), taxes other than income taxes (6.0% and 12.2%), cost of real estate
sold  (72.1%  and  17.0%) and general and administrative expenses (2.5% and
5.4%)  for the nine months ended July 31, 1999 and 1998, respectively.  The
1999  increase  in  real estate expenses is due primarily to the $1,480,000
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 July 31, 1999 of
$420,000  decreased by $65,000 (13.4%) from $485,000 for the same period in
1999.    Real  estate  expenses  were  comprised  of  labor,  operating and
maintenance  (29.1%  and  43.1%),  depreciation  and amortization (7.0% and
10.9%),  taxes  other  than  income  taxes  (11.1% and 10.4%), cost of real
estate sold (47.8% and 31.1%) and general and administrative expenses (5.0%
and  4.5%) for the three months ended July 31, 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 $840,000.


     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  nine  months  ended July 31, 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 nine month periods ended July 31, 1999 and
1998,  respectively.  The Company s art inventory was reduced through sales


by $840,000 in the first half of fiscal 1999.


     There  were no art revenues for the three month periods ended July 31,
1999 and 1998.


Art Expenses

     Art  expenses  for  the  nine  months  ended July 31, 1999 of $251,000
decreased  by  $160,000  from  $411,000  for  the same period in 1998.  Art
expenses  (net  of  a  valuation  allowance  of $621,000 in fiscal 1999 and
$380,000  in  fiscal  1998)  consisted  of  the cost of art sold (96.2% and
96.3%) and selling, general and administrative expenses (3.8% and 3.9%) for
the  nine  month  periods ended July 31, 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.

     Art  expenses  for  the  three  months  ended July 31, 1999 of $11,000
increased by $1,000 from $10,000 for the same period in 1998.  Art expenses
consisted  of  the  cost of art sold (93.4% and 00.0%) and selling, general
and  administrative  expenses (6.6% and 100.0%) for the three month periods
ended July 31, 1999 and 1998, respectively.

                                     20




General and Administrative

     General and administrative expenses for the nine months ended July 31,
1999  of  $760,000  decreased  $86,000  (10.2%)  from $846,000 for the same
period  in  1998.    The  major  components  of  general and administrative
expenses  are  officers  salaries  (42.6%  and 38.2%) rent (4.0% and 8.7%),
legal  and  professional fees (7.1% and 8.5%), insurance (11.8% and 12.2%),
and  office salaries (11.0% and 9.9%) for the nine month periods ended July
31,  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 July
31,  1999  of $244,000 decreased $39,000 (13.8%) from $283,000 for the same
period  in  1999.    The  major  components  of  general and administrative
expenses  are  officers  salaries  (42.9% and 38.1%), rent (0.1% and 9.0%),
legal  and  professional  fees (7.1% and 8.5%), insurance (12.0% and 12.2%)
and office salaries (11.2% and 9.9%) for the three month periods ended July
31,  1999  and  1998, respectively.  The decrease in rent expense is due to
the  Company  relocating  its New York office space in a deal that provided
for a period of eight months free rent.



Interest and Other Income

     Interest  and  other  income  for  the nine months ended July 31, 1999
increased to $11,000 from $1,000 for the same period in 1998.  Interest and
other  income  for the three months ended July 31, 1999 of $1,000 increased
$1,000 from zero for the same period in 1998.  Interest and other income is
comprised primarily of interest income.





Interest Expense

     Interest  expense  for  the  nine months ended July 31, 1999 decreased
37.4% to $386,000 as compared to $617,000 for the same period in 1998.  The
1999 decrease is due primarily to a reduction in aggregate debt outstanding
at July 31, 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 July 31, 1999 decreased
61.7%  to  $74,000 as compared to $194,000 for the same period in 1998. The
1999   decrease  is  due  primarily  to  the  decrease  in  aggregate  debt
outstanding.






                                     21
























                                  PART II

                             OTHER INFORMATION




















                                     22






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.























                                     23




                                 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: September 10, 1999













                                     24