UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549
                            FORM 10-K

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


For the fiscal year ended June 30, 1997

Commission File Number 2-5916

                    CHASE GENERAL CORPORATION
      (Exact name of registrant as specified in its charter)

       Missouri                             36-2667734
  (State of Incorporation)              (I.R.S. Employer
                                     (Identification Number)

          3600 Leonard Road, St. Joseph, Missouri  64503
             (Address of principal executive offices)

Registrants' telephone number, including area code:(816) 279-1625

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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.
                                     x    Yes       No


Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  X 


State the aggregate market value of the voting stock held by non-
affiliates of registrant:  Voting stock not actively traded.
Therefore, market value of stock unknown as of 60 days prior to
the date of this filing.

Indicate the number of shares outstanding of each of the
registrants' classes of common stock as of the latest practicable
date:  969,834 (one class with $1 par value) as of June 30, 1997.

Location in this filing where exhibit index is located :   31 

Total number of pages included in this filing:   39 



<PAGE>




PART I

ITEM 1 BUSINESS

       (a)  General development of business

       (1)  Narrative history of business

            Chase General Corporation was incorporated
            November 6, 1944 for the purpose of manufacturing
            confectionery products.  In 1970 Chase General
            Corporation acquired 100% interest in its wholly-
            owned subsidiary, Dye Candy Company.  (Chase
            General Corporation and Dye Candy Company are
            sometimes referred herein as "the Company"). This
            subsidiary is the main operating company for this
            reporting entity. There were no material
            acquisitions, dispositions, new developments, or
            changes in conducting business during the past
            five fiscal years.  However, as of June 30, 1987,
            the working capital of the Company became impaired
            due to the maturity of $696,000 of notes payable. 
            During the fiscal year end 1991 a portion of the
            notes were paid in full and the remaining notes
            were extended to December 20, 1994.  Negotiation
            of a second extension of the notes began during
            fiscal year ended 1995.  An extension to December
            20, 2002 was unanimously accepted December 20,
            1995 with the agreement that this will be the
            final extension.  Refer to "Management's
            Discussion and Analysis of Financial Condition and
            Results of Operations" contained in Part II of
            this filing for further information.

       (2)  Not applicable.

  (b)  Financial information about industry segments

       The products of the Chase Candy Division and the Poe
       Candy Division of Dye Candy Company are sold to the
       same types of customers in the same geographical areas. 
       In addition, both divisions share a common labor force
       and utilize the same basic equipment and raw materials
       in production.  Therefore, due to the similarity in the
       marketing and manufacturing of the products, segment
       reporting for these divisions is not required to be
       disclosed in accordance with FASB 14.

  (c)  Narrative description of businesses

       (1)  Description of business done and intended to be
            done by dominant single industry

            (i)  The principal products produced and methods
                 of distribution are as follows:


                           (Continued)


<PAGE>



ITEM 1 BUSINESS (CONTINUED)

            Chase Candy Division of Dye Candy Company produces
            a candy bar under the trade name of "Cherry Mash
            [Registered Trademark]".  The bar is distributed
            in four case sizes: 

            (1)  60 count pack
            (2)  12 boxes of 24 bars per box
            (3)  192 count shipper box
            (4)  96 count shipper box

            In addition to the regular size bar, a "mini-mash"
            is distributed in four case sizes:

            (1)  24 - 12 oz. bags    
            (2)  6 jars - 60 bars per jar 
            (3)  28 # wrapped bars
            (4)  22 # unwrapped bars
            (5)  18 - 12 oz. Collector's Tin   

            The bars are sold primarily to wholesale candy and
            tobacco jobbing houses, grocery accounts, and
            vendors.  "Cherry Mash [Registered Trademark]"
            bars are marketed in the Midwest region of the
            United States.  For the years ended June 30, 1997,
            1996, and 1995, this division accounted for 54%,
            52%, and 51%, respectively,  of the consolidated
            revenue of Dye Candy Company.

            Poe Candy Division of Dye Candy Company produces
            coconut, peanut, chocolate, and fudge
            confectioneries.  These products are distributed
            in bulk or packaged.  Principal products include:

       (1)  Coconut Bon-Bons         (6)  Peanut brittle
       (2)  Coconut Stacks           (7)  Coconut cubes
       (3)  Home Style Poe Fudge     (8)  Peanut clusters
       (4)  Peco Flake               (9)  Champion Creme Drops
       (5)  Peanut Squares           (10) Jelly Candies

            The Poe line is sold primarily on a Midwest
            regional basis to national syndicate accounts,
            repackers, and grocery accounts.  For the years
            ended June 30, 1997, 1996, and 1995, this division
            accounted for 46%, 48%, and 49%, respectively, of
            the consolidated revenue of Dye Candy Company.

  (ii) Not applicable.

  (iii)     Raw materials and packaging materials are produced
            on a national basis with products coming from most
            of the states of the United States.  Raw materials
            and packaging materials are generally widely
            available, depending, of course, on common market
            influences.

                           (Continued)




<PAGE>




ITEM 1 BUSINESS (CONTINUED)

  (iv)      The largest single revenue producing product, the
            "Cherry Mash [Registered Trademark]" bar is
            protected by a trademark registered with the
            United States Government Patents Office. 
            Management considers this trademark very important
            to the Company. The trademark was renewed during
            the fiscal year ended June 30, 1985.

  (v)       The Company is a seasonal business whereby the
            largest volume of sales occur in the spring and
            fall of each year.  The net income per quarter of
            the Company varies in direct proportion to the
            seasonal sales volume.

  (vi)      Due to the seasonal nature of the business, there
            is a heavier demand on working capital in the
            summer and winter months of the year when the
            Company is building its inventories in
            anticipation of fall and spring sales.  The
            fluctuation of demand on working capital due to
            the seasonal nature of the business is common to
            the confectionery industry.  If necessary, the
            Company has the ability to borrow short term funds
            in early fall to finance operations prior to
            receiving cash collections from fall sales.  The
            Company occasionally offers extended payment terms
            of up to sixty days.  Since this practice is
            infrequent, the effect on working capital is
            minimal.

  (vii)     For the year ending June 30, 1997 and 1996 and
            1995, Associated Wholesale Grocers of Springfield,
            Mo, accounted for 13.08%, 10.79% and 11.88% of
            gross sales, respectively. The loss of this
            customer would not have an adverse effect on the
            Company as customer purchases and distributes to
            retail outlets and these outlets would continue to
            demand products offered by Dye Candy Company.

  (viii)    Prompt, efficient service are traits demanded in
            the confectionery industry resulting in a
            continual low volume of back-orders.  Therefore,
            at no time during the year does the Company have a
            significant amount of back-orders.

  (ix)      Not applicable.

                           (Continued)



<PAGE>



ITEM 1 BUSINESS (CONTINUED)

  (x)       The confectionery market for the type of product
            produced by the divisions of Dye Candy Company is
            very competitive and quality minded.  The
            confectionery (candy) industry in which the
            divisions operate is highly competitive with many
            small companies and, within certain specialized
            areas, a few competitors dominate.  In the United
            States, the dominant competitors in the coconut
            candy industry are Bradley Candy Company, Crown
            Candy Company, Vermico Candy Company, and the Poe
            Division of Dye Candy Company with approximately
            70% of the market share among them.  In the United
            States, Sophie Mae and Old Dominion have
            approximately 80% of the market share of the
            peanut candy business in which the Poe Division
            operates.  Dye Candy Company sells approximately
            90% of its products in the Midwest region with
            seasonal orders being shipped to the Southern and
            Eastern regions of the United States.  Except for
            the coconut candy industry, Dye Candy Company is
            not a dominant competitor in any of the candy
            industries in which it competes.  Principal
            methods of  competition the Company uses include
            quality of product, price, reduced transportation
            costs due to central location, and service.  The
            Company's competitive position is positively
            influenced by labor costs being lower than
            industry average.  Chase General Corporation is
            firmly established in the confectionery market and
            through its operating divisions has many years'
            experience associated with its name.

  (xi)      Not applicable.

  (xii)     To the best of management's knowledge, the Company
            is presently in compliance with all environmental
            laws and regulations and does not anticipate any
            future expenditures in this regard.

  (xiii)    The Company employs approximately 25 full time
            personnel year round which expands to
            approximately 50 full time personnel during the
            two busy production seasons.

  (d)  Foreign and domestic operations and export sales

       The Company has no foreign operations or export sales. 
       In addition, all domestic sales are primarily in the
       Midwest region of the United States.



<PAGE>



ITEM 2 PROPERTIES

       The registrant operates out of two buildings consisting
       of the following:

       Chase and Poe Warehouse - This building located in St.
       Joseph, Missouri is owned by Dye Candy Company, a
       wholly-owned subsidiary of the registrant.  The
       facilities are currently devoted entirely to the
       storage of supplies, and the warehousing and shipping
       of candy products.  This warehouse consists of a sixty-
       six year old building which is in fair condition and is
       adequate to meet present requirements.  The warehouse
       has approximately 15,000 square feet.

       Chase General Office and Dye Candy Company Operating
       Plant - The building housing the office and plant is
       located in St. Joseph, Missouri, and was originally
       owned by Chase Building Corporation, a wholly-owned
       subsidiary of Dye Candy Company.  In March, 1975, the
       subsidiary was liquidated by Dye Candy Company. 
       Subsequently, the Company sold this facility.  The
       property was leased from the purchaser in March, 1975. 
       Refer to Note 3, "Notes to Financial Statements," for
       terms of the lease.  The building contains the general
       offices of Chase General Corporation, Dye Candy
       Company, and its divisions.  The production plant of
       Dye Candy Company occupies the remainder of the
       building.  The building was acquired new in 1964 and
       was specifically designed for the type of operations
       conducted by the registrant.  The facility is adequate
       to meet present requirements.  The operating plant is
       approximately 20,000 square feet and the office is
       approximately 2,000 square feet.  The Company
       renegotiated the original lease on this building which
       expired March 31, 1995.  The terms of the new lease
       began April 1, 1995 and continues for ten years.  

ITEM 3 LEGAL PROCEEDINGS

       The Company is not, and has not been, a party in any
       material pending legal proceedings, other than ordinary
       litigation incidental to its business, during the
       fiscal year ended June 30, 1997, nor are any such
       proceedings contemplated.  

ITEM 4 RESULTS OF VOTES OF SECURITY HOLDERS

       No matters were submitted to a vote of security holders
       of the registrant during the fourth quarter of the
       fiscal year ended June 30, 1997.



<PAGE>


                             PART II

ITEM 5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
       STOCKHOLDER MATTERS

       (a)  Market information

            There is no established public trading market for
            the common stock (par value $1 per share) of the
            Company.

       (b)  Approximate number of security holders

            As of June 30, 1997, the latest practicable date,
            the approximate number of record holders of common
            stock was 1,439, including individual participants
            in security listings.

       (c)  Dividends

            (1)  Dividend history and restrictions

                 No dividends have been paid during the past
                 three fiscal years.  Refer to Note 1, "Notes
                 to Financial Statements" for dividend
                 restrictions.

            (2)  Dividend policy

                 There is no set policy on the payment of
                 dividends due to the financial condition of
                 the Company and other factors.  It is not
                 anticipated that cash dividends will be paid
                 in the foreseeable future.

ITEM 6 SELECTED FINANCIAL DATA

       (a)  Last five years

                      06-30-97       06-30-96       06-30-95

(i)   Net  sales or 
      operating revenue $2,317,501     $2,316,031     $2,235,656

(ii)  Income from 
      continuing 
      operations        $   50,174     $   63,703     $   60,146

(iii) Income (loss) 
      from continuing
      operations per 
      common share *    $  (.08)       $  (.07)       $  (.07)

(iv)  Total assets      $  836,871     $  815,954     $  797,909

(v)   Long-term debt    $  207,659     $  242,980     $      -

(vi)  Cash dividend 
      declared per 
      common share      $     -        $    -         $      -


                              06-30-94            06-30-93

(i)   Net  sales or 
      operating revenue      $2,476,259          $2,531,740

(ii)  Income from 
      continuing 
      operations             $   25,421          $   95,015

(iii) Income (loss) 
      from continuing
      operations per 
      common share *         $    (.11)          $    (.03)

(iv)  Total assets           $  784,506          $  737,169

(v)   Long-term debt         $    -              $  302,802

(vi)  Cash dividend 
      declared per 
      common share           $    -              $      -


          (b)  No additional years necessary to keep the summary
               from being misleading.


* Refer to Note 6, "Notes to Financial Statements" for
computation of income (loss) from continuing operations per
common share.





<PAGE>





ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

          (a & b)   Liquidity and capital resources

          Positive cash flows from operating activities were
          generated for fiscal years ended June 30, 1997, 1996
          and 1995 in the amounts of $8,940, $104,944 and
          $116,893, respectively.

          At various times during the years, and in anticipation
          of heavier cash demands due to seasonal production,
          plant improvements, and/or major promotional programs,
          it is the Company's practice to invest in short term
          U.S. Treasury obligations or financial institution
          certificates of deposit.  At June 30, 1997, the Company
          had $90,000 invested in short term certificates of
          deposit to meet the 1997 fall production season.  No
          funds were invested in temporary investments at June
          30, 1996 and 1995.

          The Company continually monitors raw material pricing,
          and when a price increase/decrease is anticipated
          adjustments to inventory levels are made accordingly. 
          In late spring 1997, predicted weather conditions
          dictated a future increase in peanut costs.  Therefore,
          the Company purchased additional peanut inventory for
          its fall production season.  In addition, the Company
          had $215,189 of outstanding raw material purchase
          commitments at June 30, 1997 compared to $269,000 at
          June 30, 1996.  The above two factors increased raw
          material inventory at June 30, 1997.  At June 30, 1996,
          raw material costs were declining, and accordingly,
          June 30, 1996 raw material inventory was lower than
          June 30, 1995.  Packaging inventory is consistently
          maintained at a relatively higher balance than other
          inventories since packaging materials are continually
          purchased in large volumes and carried for several
          years due to the high cost from suppliers to cut dies
          and print materials.  The modest increase in packaging
          supplies at June 30, 1997 is due to the purchase of a
          new packaging display case for distribution to
          convenience stores.  Finished goods inventory increased
          from prior years due to timing of production to prepare
          for the fall sales.  Finished goods are produced when
          it is most advantageous from a labor stand point and
          stored in the warehouse.  Goods in process remained
          comparable to prior years.

          The Company continues to write off equipment that is no
          longer useful to the operations of the Company.  These
          write offs have been immaterial over the past three
          years.  The Company also continues to replace old
          equipment on a yearly basis in order to streamline
          operations.  However, due to cash flow needs in other
          areas, the Company has not been able to update the
          equipment at any significant level.  In June 1996, the
          Company purchased $69,443 of new equipment.  The
          equipment was not in operation at June 30, 1996 but was
          ready for production in early fall of 1996.  The
          equipment consists of a wrapper machine and metal
          detector. Additional expenditures of $5,113 were made
          during fiscal year ended June 30, 1997 to make the
          equipment completely operational.  The Company spent an
          additional $59,783 during 1997 to update transportation
          equipment, add to leasehold improvements, and replace
          outdated equipment.  Depending on results of operations
          and cash flows, the Company is hoping to replace their
          antiquated brittle cookers in the next several years
          with no set target date. 

                           (Continued)


<PAGE>




ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

          For the past six years, the Company has not been
          indebted except for the series B notes.  Of the
          original $630,000 Series B notes payable, $213,953
          remain outstanding at June 30, 1997.  The Company
          received approval effective December 20, 1995 to extend
          the notes to December 20, 2002 at the current 6% rate
          of interest.  Of the $213,953 amount outstanding at
          June 30, 1997, $6,294 has been classified as a current
          liability and $207,659 is classified as long-term. 
          Realizing the minimum yearly principal payment required
          by the note indenture will not satisfy the notes on
          December 20, 2002, the Company has accelerated the
          principal payments on the notes during the past two
          fiscal years.  It is anticipated that acceleration of
          principal payments will continue if cash is not
          required for operations and equipment replacement.

          The Company's lease on its manufacturing facility
          expired March 31, 1995.  The lease was renewed
          effective April 1, 1995 for a period of 10 years at
          $2,955 per month.

     (c)  Results of Operations

          Under the leadership of the CEO and his sales staff,
          the Company has now stabilized its customer base as
          well as the cost of sales, selling, and general and
          administrative expenses.  Consequently there are no
          significant fluctuations in the above expense
          categories in the past three years.  Certainly some
          customers have been lost, but those have been replaced. 
          The Company continues to look for new markets but only
          when the addition of a new market is profitable.
          
          In order to maintain funds to finance operations and
          meet debt obligations, it is the intention of
          management to continue its efforts to expand the
          present market area and increase sales to its
          customers. Management also intends to continue tight
          control on all expenditures.

          There has been no material impact from inflation and
          changing prices on net sales and revenues or on income
          from continuing operations for the last three fiscal
          years.

          The effects of the Tax Reform Act of 1986 on the
          Company's liquidity  and results of operations for the
          years ending June 30, 1995 through 1997 were immaterial
          and therefore the Company did not feel it necessary to
          record any deferred taxes as the result of the Tax
          Reform Act.  As of the date of this filing, the Company
          does not feel that future years' liquidity and
          operations will be adversely affected by the Taxpayer
          Relief Act of 1997. In addition, the Company does not
          feel that any accounting changes, as proposed by the
          Financial Accounting Standards Board, with effective
          dates after the date of this report, will have a
          material effect on future financial statements of the
          Company.



                           (Continued)


<PAGE>


ITEM 7A   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK

          Not applicable.  Refer to Note 7, "Notes to Financial
          Statements" for fair value of financial instruments as
          of June 30, 1997.


ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          Financial statements meeting the requirements of
          Regulation S-X are contained on pages 11 through 25 of
          the filing.

          (a)  Selected quarterly financial data

               Exempt from requirements per second major
               condition for smaller companies.

          (b)  Information about oil and gas producing activities

               Registrant is not engaged in any oil and gas
               producing activities.

ITEM 9    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

          Not applicable.  There has been no change in
          accountants for approximately twenty-two years and no
          disagreements on accounting or financial disclosure.




<PAGE>


                   INDEPENDENT AUDITOR'S REPORT




Board of Directors
Chase General Corporation
St. Joseph, Missouri



We have audited the accompanying consolidated balance sheets of
Chase General Corporation and Subsidiary as of June 30, 1997 and
1996 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the
three-year period ended June 30, 1997.  These consolidated
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Chase General Corporation and Subsidiary as of June
30, 1997 and 1996, and the results of their operations and their
cash flows for each of the years in the three-year period ended
June 30, 1997, in conformity with generally accepted accounting
principles.





St. Joseph, Missouri
August 21, 1997



<PAGE>



             CHASE GENERAL CORPORATION AND SUBSIDIARY
                   CONSOLIDATED BALANCE SHEETS
                      June 30, 1997 and 1996

                              ASSETS

                                                      1997          1996
CURRENT ASSETS
  Cash and cash equivalents                        $ 141,657     $236,316
  Trade receivables, less 
    allowance for doubtful
    accounts of $12,714 in 1997 
    and $12,757 in 1996                               83,579       74,754
  Inventories:
    Finished goods                                    89,725       51,204
    Goods in process                                   3,560        2,024
    Raw materials                                     92,975       42,189
    Packaging materials                              115,251      104,565
  Prepaid expense                                     39,791       42,659
  Prepaid income taxes                                 5,996            -     
    Total current assets                             572,534      553,711

PROPERTY AND EQUIPMENT
  Land                                                35,000       35,000
  Buildings                                           76,273       76,273
  Machinery and equipment                            628,844      593,754
  Trucks and autos                                    91,824       87,683
  Office equipment                                    32,100       30,155
  Leasehold improvements                             121,356      119,146
    Total, at cost                                   985,397      942,011
  Less accumulated depreciation                      721,060      679,768

    Total property and equipment                     264,337      262,243



TOTAL ASSETS                                        $836,871     $815,954



<PAGE>



               LIABILITIES AND STOCKHOLDERS' EQUITY

                                                       1997          1996
CURRENT LIABILITIES
  Accounts payable                                 $  59,162    $  46,943
  Series B notes payable, related 
    parties current maturities                         2,266        3,483
  Series B notes payable, unrelated 
    parties current maturities                         4,028        6,193
  Income tax payable                                       -        2,164
  Accrued expense:
    Interest                                          13,998       16,214
    Other                                             24,685       23,078

*   Total current liabilities                        104,139       98,075

LONG-TERM LIABILITIES
  Series B notes payable, related 
    parties less current maturities 
    above                                             75,177       87,969
  Series B notes payable, unrelated 
    parties less current maturities 
    above                                            132,482      155,011

      Total long-term liabilities                    207,659      242,980

      Total liabilities                              311,798      341,055

STOCKHOLDERS' EQUITY
  Capital stock issued and outstanding:
    Prior cumulative preferred stock, 
    $5 par value:
      Series A (liquidation preference 
        $1,155,000 and $1,125,000 
        respectively)                                500,000      500,000
      Series B (liquidation preference 
        $ 1,110,000 and $1,080,000 
        respectively)                                500,000      500,000
    Cumulative preferred stock, 
      $20 par value: 
      Series A (liquidation preference 
        $2,794,951 and $2,736,418 
        respectively)                              1,170,660    1,170,660
      Series B (liquidation preference 
        $455,487 and $445,948 
        respectively)                                190,780      190,780
    Common stock, $1 par value                       969,834      969,834
  Paid-in capital in excess of par                 3,134,722    3,134,722
  Accumulated deficit                            (5,940,923)  (5,991,097)

      Total stockholders' equity                     525,073      474,899


TOTAL LIABILITIES AND STOCKHOLDERS' 
  EQUITY                                          $  836,871   $  815,954

     These consolidated financial statements should be read
     only in connection with the accompanying summary of
     significant accounting policies and notes to
     consolidated financial statements.



<PAGE>



             CHASE GENERAL CORPORATION AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF OPERATIONS
             Years Ended June 30, 1997, 1996 and 1995


                                        1997         1996          1995  

NET SALES                             $2,317,501  $2,316,031   $2,235,656

COST OF SALES                          1,787,350   1,771,381    1,715,729

 Gross profit                            530,151     544,650      519,927

OPERATING EXPENSES
 Selling expense                         302,871     295,561      277,540
 General and administrative 
   expense                               156,697     156,875      155,567

   Total operating expenses              459,568     452,436      433,107

      Income from operations              70,583      92,214       86,820

OTHER INCOME (EXPENSE)
 Interest income                           7,388       6,362        7,011
 Miscellaneous income                      1,272       1,643        1,407
 Loss on disposal of equipment                 -        (69)        (128)
 Interest expense                       (13,998)    (16,214)     (17,718)

   Total other income 
      (expense)                          (5,338)     (8,278)      (9,428)

      Income before income 
        taxes                             65,245      83,936       77,392

PROVISION FOR INCOME TAXES                15,071      20,233       17,246

NET INCOME                               $50,174     $63,703      $60,146

(LOSS) PER SHARE OF COMMON 
   STOCK                                 $ (.08)     $ (.07)      $ (.07)






     These consolidated financial statements should be read
     only in connection with the accompanying summary of
     significant accounting policies and notes to
     consolidated financial statements.



<PAGE>



             CHASE GENERAL CORPORATION AND SUBSIDIARY
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
             Years Ended June 30, 1997, 1996 and 1995


                        Prior Cumulative         Cumulative
                        Preferred Stock       Preferred Stock
                      Series A   Series B    Series A  Series B


BALANCE (DEFICIT), 
JULY 1, 1994         $500,000    $500,000    $1,170,660  $190,780

   Net income            -           -           -          -

BALANCE (DEFICIT), 
JUNE 30, 1995         500,000     500,000     1,170,660   190,780

   Net income            -           -           -           -

BALANCE (DEFICIT), 
JUNE 30, 1996         500,000     500,000     1,170,660   190,780

   Net income            -           -           -          -

BALANCE (DEFICIT), 
JUNE 30, 1997      $  500,000    $500,000   $ 1,170,660 $ 190,780



                                 Common    Paid-in     Accumulated 
                                 Stock     Capital       Deficit     Total 


BALANCE (DEFICIT), 
JULY 1, 1994                  $969,834  $3,134,722  $(6,114,946)    $351,050

   Net income                        -           -        60,146      60,146

BALANCE (DEFICIT), 
JUNE 30, 1995                  969,834   3,134,722   (6,054,800)     411,196

   Net income                        -           -        63,703      63,703

BALANCE (DEFICIT), 
JUNE 30, 1996                  969,834   3,134,722   (5,991,097)     474,899

   Net income                        -           -        50,174      50,174

BALANCE (DEFICIT), 
JUNE 30, 1997                 $969,834  $3,134,722  $(5,940,923)   $ 525,073



     These consolidated financial statements should be read
     only in connection with the accompanying summary of
     significant accounting policies and notes to
     consolidated financial statements.




<PAGE>


             CHASE GENERAL CORPORATION AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF CASH FLOWS
             Years Ended June 30, 1997, 1996 and 1995


                                            1997       1996        1995  

CASH FLOWS FROM OPERATING 
ACTIVITIES
 Collections from customers             $2,305,349 $2,305,712  $2,239,899
 Interest received                           7,388      6,362       7,011
 Other income                                1,272      1,643       1,407
 Income tax refunds                              -          -      33,435
 Cost of sales, selling, 
   general and administrative 
   expenses paid                       (2,265,624)(2,161,733) (2,141,693)
 Interest paid                            (16,214)   (17,718)    (18,693)
 Income tax paid                          (23,231)   (29,322)     (4,473)

   Net cash provided by 
   operating activities                      8,940    104,944     116,893

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of U.S. Treasury 
   obligation                                    -   (99,308)   (100,827)
 Purchase of certificate of 
   deposit                                       -  (100,000)           -
 Purchases of property and 
   equipment                              (64,896)  (134,052)    (10,161)
 Proceeds on redemption of U.S. 
   Treasury obligation                           -     99,308     200,020
 Proceeds on redemption of 
   certificate of deposit                        -    100,000           - 

   Net cash provided by (used in)
     investing activities                 (64,896)  (134,052)      89,032

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on notes 
 payable, Series B                        (38,703)   (35,146)    (15,000)
 
   Net cash used in financing 
   activities                             (38,703)   (35,146)    (15,000)

NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                     (94,659)   (64,254)     190,925

CASH AND CASH EQUIVALENTS,
 BEGINNING OF YEAR                         236,316    300,570     109,645

CASH AND CASH EQUIVALENTS,
 END OF YEAR                              $141,657   $236,316    $300,570



<PAGE>


                                            1997       1996        1995  

RECONCILIATION OF NET INCOME 
 TO NET CASH PROVIDED BY 
 OPERATING ACTIVITIES

   Net income                             $ 50,174   $ 63,703    $ 60,146

 Adjustments to reconcile 
 net income to net cash provided 
 by operating activities:
   Depreciation                             62,802     41,670      42,903
   Loss on disposal of equipment                 -         69         128
   Provision for doubtful accounts           3,327      6,416      10,033
   Effects of changes in 
     operating assets and 
     liabilities:
      Trade accounts receivable           (12,152)   (10,319)      4,243 
      Inventories                        (101,529)    10,321      (7,709)
      Prepaid expense                       2,868      3,596       3,937 
      Prepaid income taxes                 (5,996)         -      34,955 
      Accounts payable                     12,219      1,180     (41,904)
      Income tax payable                   (2,164)    (9,089)     11,253 
      Accrued liabilities                    (609)    (2,603)     (1,092)

NET CASH PROVIDED BY
 OPERATING ACTIVITIES                       $8,940   $104,944    $116,893





     These consolidated financial statements should be read
     only in connection with the accompanying summary of
     significant accounting policies and notes to
     consolidated financial statements.



<PAGE>


             CHASE GENERAL CORPORATION AND SUBSIDIARY
            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Chase General Corporation was incorporated on November 6, 1944 in
the State of Missouri for the purpose of manufacturing
confectionery products. The Company grants credit terms to
substantially all customers, consisting of repackers, grocery
accounts, and national syndicate accounts, who are primarily
located in the Midwest region of the United States.  The
Company's fiscal year ends June 30.  Significant accounting
policies followed by the Company are presented below:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Dye Candy Company.  All
intercompany transactions and balances have been eliminated in
consolidation.

ACCOUNTING METHOD

The Company and its subsidiary use the accrual method of
accounting.  Under this method, revenue is recognized when earned
and expense is recognized when the obligation is incurred.

SEGMENT REPORTING OF THE BUSINESS

The subsidiary, Dye Candy Company, operates two divisions, Chase
Candy Company and Poe Candy Company.  Operations in Chase Candy
Company involve production and sale of a candy bar marketed under
the trade name "Cherry Mash".  Operations in Poe Candy Company
involve production and sale of coconut, peanut, chocolate, and
fudge confectioneries.  Division products are sold to the same
type of customers in the same geographical areas.  In addition,
both divisions share a common labor force and utilize the same
basic equipment and raw materials.  Therefore, due to the
similarities in the products manufactured, segment reporting for
the two divisions has not been disclosed in these financial
statements.

For the year ending June 30, 1997, June 30, 1996 and June 30,
1995 one customer accounted for 13.08%, 10.79%, and 11.88% of the
gross sales respectively.  

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.



<PAGE>


             CHASE GENERAL CORPORATION AND SUBSIDIARY
            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


CASH AND CASH EQUIVALENTS

The Company considers all liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

INVENTORIES

Inventories are carried at the "lower of cost or market value,"
cost being determined on the "first-in, first-out" basis of
accounting.

PROPERTY AND EQUIPMENT

Depreciation is computed by the straight-line method for
additions prior to 1981, and by the ACRS and MACRS methods for
assets acquired after 1980 for both financial reporting and
income tax purposes.  Any difference between the amount of
depreciation determined under the ACRS and MACRS systems and that
determined in accordance with generally accepted accounting
principles is considered to be immaterial.

The Company's property and equipment are being depreciated on
straight-line and accelerated methods over the following
estimated useful lives:

     Buildings                          25 years
     Machinery and equipment            3 - 10 years
     Trucks and autos                   3 - 5 years
     Office equipment                   5 - 10 years
     Leasehold improvements             8 - 31.5 years


For the years ending June 30, 1997, 1996 and 1995, the
depreciation expense was $62,802, $41,670 and $42,903,
respectively.


     This information is an integral part of the accompanying
                consolidated financial statements.



<PAGE>



             CHASE GENERAL CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - NOTES PAYABLE, SERIES B

On December 1, 1967, the Company issued Collateral Sinking Fund
6% Income Registered Notes in the amount of $680,000.  These
notes were issued to extend and consolidate notes and
certificates of indebtedness then held by F. S. Yantis & Co.,
Inc. (Yantis & Co.), aggregating approximately $569,000 together
with unpaid accrued interest of $111,000.  Interest is payable
from "surplus net earnings" on the 20th day of December following
the fiscal year end.

Pursuant to a supplemental indenture, dated April 1, 1968 and
executed in compliance with a request by Yantis & Co. in
furtherance of the winding-up of its affairs, the original notes
aggregating $680,000 were reissued in two series designated as A
and B, respectively.  The Series A notes aggregating $50,000 had
priority and were retired during the year ended June 30, 1984. 
The Series B notes totaling $630,000 are held by the former
shareholders of Yantis & Co.  During the years ended June 30,
1997 and 1996, $38,703 and $35,146 principal was paid on the
Series B notes, respectively.

As of June 30, 1997 and 1996, the outstanding Series B notes
total $213,953 and $252,656, respectively. Of these amounts
$77,443 and $91,452 are owed to officers and directors of the
Company.

The Company has agreed to secure the payment of principal and
interest on the notes by the pledge of the capital stock of Dye
Candy Company under an indenture dated December 1, 1967, and
supplemental indenture dated June 30, 1970.

The indenture provides for a sinking fund deposit to be made by
the Company each year of not less than one-fourth of the
Company's fiscal year "surplus net earnings," which exceeds the
amount of interest required to be paid on the outstanding notes. 
If at any time the sinking fund deposits aggregate $10,000 or
more, the same will be applied to prepayment of the notes
outstanding.  At June 30, 1997 and 1996, all sinking fund
deposits had been disbursed to the noteholders.  The "surplus net
earnings" is the amount by which the consolidated net income,
after adding back the current year's interest on the outstanding
notes, exceeds a $25,000 working capital reserve.

See Note 2 for computation of "surplus net earnings" and sinking
fund requirements for years ended June 30, 1997, 1996 and 1995.

                           (Continued)



<PAGE>



             CHASE GENERAL CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - NOTES PAYABLE, SERIES B (CONTINUED)

Principal payments are made by the trustee under terms of the
indenture and may be prepaid at the option of the Company. 
During the year ended June 30, 1991, the notes were extended to
December 20, 1994.  Effective December 20, 1995, the notes were
extended to December 20, 2002 at the same 6% interest rate and
with the agreement that this will be the final note extension. 
Due to the nature of sinking fund requirements, it is not
practicable to include a schedule of future principal payments.

Dividends, other than stock dividends, may not be paid on capital
stock at any time interest on the notes is not current.


NOTE 2 - "SURPLUS NET EARNINGS" AND SINKING FUND REQUIREMENTS

The following is an analysis of the computation of the "surplus
net earnings" and sinking fund requirements for years ended June
30:

                                             1997       1996       1995  
NET INCOME (LOSS)
 Chase General Corporation                $(14,737)  $(18,655)  $(18,922)
 Dye Candy Company                          64,911     82,358     79,068 

   Consolidated net income                  50,174     63,703     60,146 

NON-ALLOWANCE EXPENSE DEDUCTION
 Interest on indebtedness                   13,998     16,214     17,718 

   Net income basis for 
   "surplus net earnings"                   64,172     79,917     77,864 

DEDUCTIONS FROM INCOME BASIS
 Set aside as reserve for 
 accumulation of working capital            25,000     25,000     25,000 

   "Surplus net earnings"                   39,172     54,917     52,864 

INTEREST PAYMENT REQUIRED                   13,998     16,214     17,718 

EXCESS "SURPLUS NET EARNINGS" 
OVER INTEREST PAYMENT REQUIRED             $25,174    $38,703    $35,146 

SINKING FUND REQUIREMENT                   $ 6,294    $ 9,676    $ 8,787 



<PAGE>




             CHASE GENERAL CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - COMMITMENTS

Dye Candy Company leases its manufacturing facilities located at
3600 Leonard Road, St. Joseph, Missouri.  The original lease,
which commenced March 31, 1975, was for a twenty-year period and
required a monthly rental fee of $2,263, payable on the first day
of each calendar month.  This lease was renegotiated effective
April 1, 1995 for 10 years at $2,955 per month.  Rental expense
for the years ended June 30, 1997, 1996 and 1995 totaled $35,460,
$37,723 and $29,232, respectively and is included in cost of
sales.

Future minimum lease payments under this lease are as follows:

Year ending June 30, 1998     $    35,460
Year ending June 30, 1999          35,460
Year ending June 30, 2000          35,460
Year ending June 30, 2001          35,460
Year ending June 30, 2002          35,460
Later years                        97,515

     Total                    $   274,815


The manufacturing facilities referred to above were owned by Dye
Candy Company prior to March 31, 1975.  When the building was
sold on March 31, 1975, the gain on the sale of the building was
included in the income of Dye Candy Company in the year of sale. 
Financial Accounting Standards Board Statement 13, Accounting for
leases, calls for the amortization of any profit or loss on a
sale-leaseback transaction to be amortized in proportion to the
amortization of the leased asset.  However, the effective date of
FASB 13 was for transactions entered into after January 1, 1977.

As of June 30, 1997, the Company had purchase commitments with
two vendors for approximately $215,189.



<PAGE>




             CHASE GENERAL CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - CAPITAL STOCK

Capital stock authorized, issued and outstanding as of June 30,
1997 and 1996 is as follows:

                                        Shares
                                                  Issued and
                              Authorized          Outstanding

Prior Cumulative Preferred 
Stock, $5 par value:                       240,000
     6% Convertible
          Series A                                            100,000
          Series B                                            100,000

Cumulative Preferred Stock, 
$20 par value:                             150,000
     5% Convertible
          Series A                                             58,533
          Series B                                              9,539

Common Stock, $1 par value               2,000,000            969,834
  Reserved for conversion of 
     Preferred Stock - 
     1,030,166 shares


Cumulative Preferred Stock dividends in arrears at June 30, 1997
and 1996, totaled $5,515,438 and $5,387,366, respectively.  Total
dividends in arrears, on a per share basis, consist of the
following at June 30:

                                             1997           1996

6% Convertible
     Series A                                $12            $11
     Series B                                 11             11

5% Convertible 
     Series A                                 48             47
     Series B                                 48             47


                           (Continued)



<PAGE>



             CHASE GENERAL CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - CAPITAL STOCK (CONTINUED)

Six Percent Convertible Prior Cumulative Preferred Stock may,
upon thirty days prior notice, be redeemed by the Corporation at
$5.25 a share plus unpaid accrued dividends to date of
redemption.  In the event of voluntary liquidation, holders of
this stock are entitled to receive $5.25 per share plus accrued
dividends.  It may be exchanged for common stock at the option of
the shareholders in the ratio of four common shares for one share
of Series A and 3.75 common shares for one share of Series B.

The Company has the privilege of redemption of 5% convertible
cumulative preferred stock at $21.00 a share plus unpaid accrued
dividends.  In the event of voluntary or involuntary liquidation,
holders of this stock are entitled to receive $20.00 a share plus
unpaid accrued dividends.  It may be exchanged for common stock
at the option of the shareholders, in the ratio of 3.795 common
shares for one of preferred.


NOTE 5 - PROVISION FOR INCOME TAXES

The provision for income taxes consists of the following as of
June 30:

                          1997           1996          1995

Federal income tax  $    10,630    $    15,420    $    13,204
State income tax          3,814          4,813          4,013
Correction of prior 
     year provision         627            -               29

  Total provision   $    15,071    $    20,233    $    17,246



<PAGE>




             CHASE GENERAL CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - (LOSS) PER SHARE OF COMMON STOCK

The loss per share was computed on the weighted average of
outstanding common shares during the years as follows:


                          1997           1996           1995
Net income          $    50,174    $    63,703    $    60,146

Preferred dividend 
  requirements:
     6% Prior 
     Cumulative 
     Preferred, 
     $5 par value        60,000         60,000         60,000

     5% Convertible 
     Cumulative 
     Preferred, 
     $20 par value       68,072         68,072         68,072

     Total dividend 
      requirements       128,072        128,072        128,072

     Net loss - 
     common 
     stockholders   $    (77,898)  $    (64,369)  $    (67,926)

     Weighted 
     average of 
     outstanding 
     common shares       969,834        969,834        969,834

     Loss per share $    (.08)     $    (.07)     $    (.07)


No computation was made on common stock equivalents outstanding
at year-end because earnings per share would be anti-dilutive.

NOTE 7 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist principally of cash
and cash equivalents, trade receivables and payables, and notes
payable.  There are no significant differences between the
carrying value and fair value of any of these financial
instruments.





     This information is an integral part of the accompanying
                consolidated financial statements.



<PAGE>

                             PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     (a)  Directors

          Name           Age       Periods of Service   Terms 
                                   as Director

     W.A. Yantis, III    54        1980 to present     One year
     Barry M. Yantis     52        1980 to present     One year
     Brian A. Yantis     49        07-16-86 to present One year

     An insufficient number of proxies were returned by the
     shareholders for the January 24, 1997 annual stockholder
     meeting.  Therefore, the Directors noted above are
     continuing for an additional one year term or until a
     successor is elected.

     See Item 10(b) for offices held by Barry M. Yantis and Brian
     A. Yantis.  W.A. Yantis, III has never held an office with
     the Company.

     (b)  Executive Officers
                                        Years of
                                        Service as
     Name           Age       Position  an Officer     Term 

Barry M. Yantis     52   President and       17   Until successor
                         Treasurer                     elected

Brian A. Yantis     49   Vice-President      6    Until successor
                         and Secretary                 elected
                    

     (c)  Certain Significant Employees

          There are no significant employees other than above.

     (d)  Family Relationships

          W. A. Yantis, III, Barry M. Yantis, and Brian A. Yantis
          are brothers.

     (e)  Business Experience

          (1)  Barry M. Yantis, president and treasurer has been
               an officer of the Company for seventeen years,
               twelve years as vice-president and six years as
               president.  He has been  on the board of directors
               for seventeen years and has been associated with
               the candy business for twenty-two years.

               Brian A. Yantis, vice-president and secretary has
               been an officer of the Company for six years as
               vice-president and since May 1992 as secretary. 
               He has been associated with the insurance business
               for twenty-five years and has been a Vice-President
               of Rollins, Burdick, and Hunter in Chicago, Illinois
               during the past ten years.

                           (Continued)


<PAGE>



ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
          (CONTINUED)

          (e)  Business Experience (Continued)

               W.A. Yantis III, has served as a board member of
               Chase General Corporation for seventeen years.  He
               has held the position of account manager for
               Prudential Insurance Company Asset Management
               Group in Newark, New Jersey during the past two
               years and in Chicago, Illinois during the prior
               eight years.

               (2)  The directors and executive officers listed
                    above are also the directors and executive
                    officers of Dye Candy Company.

          (f)  Involvement in Certain Legal Proceedings

               Not applicable

          (g)  Promoters and Control Persons

               Not applicable


ITEM 11 - EXECUTIVE COMPENSATION

          (a)  General

               Executive officers are compensated for their
               services as set forth in the Summary Compensation
               Table.  These salaries are approved yearly by the
               Board of Directors.

     (b)
                    Summary Compensation Table

                                      Annual Compensation
Name and                                          Other
Principal            Fiscal                      Annual
Position            Year End   Salary   Bonus  Compensation

Barry M. Yantis   1) 06-30-97 $103,025  $11,250   $2,240

Barry M. Yantis   1) 06-30-96 $90,950   $10,800   $2,100

Barry M. Yantis   1) 06-30-95 $91,000   $10,000   $1,840

                      Long Term Compensation
                           Awards              Payouts
Name and       Restricted
Principal         Stock       Option/     LTIP      All other
Position          Award (s)   SARs (#)  Payouts   Compensation

Barry M. Yantis          -       -           -         -

Barry M. Yantis          -       -           -         -

Barry M. Yantis          -       -           -         -


     1)   CEO

     2)   No other compensation other than that which is listed
          in compensation table.

     3)   No other officers are compensated for their services
          than those listed in this compensation table.


                           (Continued)


<PAGE>



ITEM 11 - EXECUTIVE COMPENSATION (CONTINUED)

          (c)  Option/SAR grants table

               Not applicable

          (d)  Aggregated option/SAR exercises and fiscal year-
               end option/SAR value table

               Not applicable

          (e)  Long-term incentive awards table

               Not applicable

          (f)  Defined benefit or actuarial plan disclosure

               Not applicable

          (g)  Compensation of Directors

               Directors are not compensated for services on the
               board.  The directors are reimbursed for travel
               expenses incurred in attending board meetings. 
               During the fiscal year 1997, $581, $124 and $-0-
               of travel expenses were reimbursed to board
               members, W.A. Yantis III, Brian A. Yantis, and
               Barry M. Yantis, respectively.

          (h)  Employment contracts and termination of employment
               and change in control arrangements

               No employment contracts exist with any executive
               officers.  In addition, there are no contracts
               currently in place regarding termination of
               employment or change in control arrangements.

          (i)  Report on repricing of option/SARs

               Not applicable

          (j)  Additional information with respect to
               compensation committee interlocks and insider
               participation in compensation decisions

               The registrant has no formal compensation
               committee.  The board of directors, W.A. Yantis
               III, Brian A. Yantis, and Barry M. Yantis, who are
               brothers, annually approve the compensation of
               Barry M. Yantis, CEO.

          (k)  Board compensation committee report on executive
               compensation

               The board bases the annual salary of the CEO on
               the Company's prior year performance.  The
               criteria is based upon, but is not limited to,
               market area expansion, gross profit improvement,
               control of operating expenses, generation of
               positive cash flow, and hours devoted to the
               business during the previous fiscal year.


                           (Continued)


<PAGE>


ITEM 11 - EXECUTIVE COMPENSATION (CONTINUED)

          (l)  Performance graph

               Not applicable as there are no dividends available
               to distribute to common stockholders after
               preferred dividends are met.  In addition, there
               is no market value price for the common stock (par
               value $1 per share) as there is no public trading
               market for the Company's stock. 


ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

                                        Amounts
                                          and
                                        Nature
                                          of
                                        Beneficial
Title of Class      Name and Address    Ownership      % of Class

(a)  Security ownership of certain beneficial owners

Common; par value 
$1 per share        Barry Yantis        97,192/1/        8.4%/2/
                    5605 Osage Drive
                    St. Joseph, Mo.
                    64503

                    Brian Yantis        97,192/1/       8.4%/2/
                    1210 E. Clarendon
                    Arlington Heights, IL.
                    60004

                    W.A. Yantis III     97,193/1/       8.4%/2/
                    29 Calais Rd.
                    Mendham, N.J.
                    07945

(b)  Security ownership of management

Common; par value 
$1 per share        All directors and   110,856         11.4%
                    officers as a group

Prior Cumulative    All directors and   21,533          21.5%
Preferred,          officers  
$5 par value:  
Series A, as a group
6% convertible 

Prior Cumulative    All directors and   21,533          21.5%
Preferred           officers  
$5 par value:  
Series B, as a group
6% convertible 

Cumulative Preferred, All directors     3,017            5.2%
$20 par value:        and officers
Series A,             as a group
$5 convertible 


                           (Continued)



<PAGE>




ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT (CONTINUED)

                                        Amounts
                                          and
                                        Nature
                                          of
                                        Beneficial
Title of Class      Name and Address    Ownership      % of Class

Cumulative Preferred, All directors        630              6.6%
$20 par value:        and officers 
Series B,             as a group
$5 convertible 

     (1)  Includes 180,721 shares which could be received within
          30 days upon conversion of preferred stock.

     (2)  Reflects the percentage 291,577 shares would represent
          if the 180,721 shares above were converted to common
          stock.

          (c)  No known change of control is anticipated.


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          (a)  Transactions with management and others

               No reportable transactions with management and
               others, to which the registrant or its subsidiary
               was a party, have occurred since the registrant's
               last fiscal year.  In addition, there are no such
               currently proposed transactions.

          (b)  Certain business relationships

               Not applicable

          (c)  Indebtedness of management

               Not applicable



                           (Continued)



<PAGE>



ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          (CONTINUED)

          (d)  Transactions with promoters

               Not applicable




                             PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

          (a)  Documents filed as part of the Form 10-K

               (1)  The following are included in Part II of this
                    report:

                                                      Page Number

               Independent Auditor's Report                    11
               Consolidated Balance Sheets - June 30, 
                    1997 and 1996                         12 - 13
               Consolidated Statements of Operations for 
                    the years ended June 30, 1997, 1996, 
                    and 1995                                   14
               Consolidated Statements of Stockholders' 
                    Equity for the years ended June 30, 
                    1997, 1996, and 1995                       15
               Consolidated Statements of Cash Flows for 
                    the years ended June 30, 1997, 1996, 
                    and 1995                              16 - 17
               Summary of Significant Accounting 
                    Policies                              18 - 19
               Notes to Consolidated Financial 
                    Statements                            20 - 25
               
               (2)  The following are included in Part IV of this
                    report:

                                                      Page Number

               Independent Auditor's Report on 
                    Supplemental Schedules                     33

               Schedule   I:  Condensed Financial 
                    Information of Registrant             34 - 37

               Schedule  II:  Valuation and Qualifying 
                    Accounts, June 30, 1997, 1996, and 
                    1995                                       38

               
          (b)  Reports on Form 8-K

               No reports on Form 8-K were filed during the
               fourth quarter of the year ended June 30, 1997.

                           (Continued)


<PAGE>


ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

          (c)  Exhibits required by Item 601 of Regulation S-K

               The following have been previously filed and are
               incorporated by reference to prior years' Forms
               10-K filed by the Registrant:

               (3)  Articles of Incorporation and By-Laws
               (21) Subsidiaries of registrant

               The following explanations are included in "Notes
               to Financial Statements" in Part II of this
               report:

               (4)  Rights of security holders including
                    indentures - Refer to Notes 1 and 4.
               (11) Computation of per share earnings - Refer to
                    Note 6.
               (21) Subsidiaries of registrant - Refer to
                    "Summary of Significant Accounting Policies".

          (d)  Financial statement schedules required by
               Regulation S-X

               Schedules required by Regulation S-X contained on
               page 34 through 38 have been excluded from the
               annual report to the shareholders.

               SUPPLEMENTAL INFORMATION TO BE FURNISHED, FILED
               PURSUANT TO SECTION 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934, BY REGISTRANTS WHICH HAVE
               NOT REGISTERED SECURITIES PURSUANT TO SECTION 12
               OF THE SECURITIES EXCHANGE ACT OF 1934.

               (1)  With this filing, the Registrant is
                    furnishing to the Commission four (4) copies
                    of the Proxy Statement regarding the
                    January 24, 1997 annual meeting mailed to
                    security holders during the 1997 fiscal year.

               (2)  During 1998 fiscal year, the Registrant will
                    furnish a copy of the annual report and any
                    Proxy information to the Commission at time
                    the aforementioned are mailed to security
                    holders.


<PAGE>




      INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTAL SCHEDULES


In connection with the audit of the consolidated financial
statements of Chase General Corporation and Subsidiary, we have
also audited supplemental schedules I and II.  In our opinion,
these schedules present fairly the financial position as set
forth therein, in conformity with generally accepted accounting
principles.





St. Joseph, Missouri
August 21, 1997




<PAGE>



                                                       SCHEDULE I

             CHASE GENERAL CORPORATION AND SUBSIDIARY
        CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

                    CHASE GENERAL CORPORATION
                        (Registrant Only)
                     CONDENSED BALANCE SHEETS
                      June 30, 1997 and 1996

                              ASSETS

                                                       1997       1996 

Income tax refund receivable                      $   4,153    $   5,853 
Investment in subsidiary - at equity                748,871      737,916 

TOTAL ASSETS                                      $ 753,024    $ 743,769 

          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Series B notes payable and accrued 
 interest, unrelated parties                      $ 145,441    $ 171,549 
Series B notes payable and accrued 
 interest, related parties                           82,510       97,321 

   Total liabilities                                227,951      268,870 

Capital stock                                     3,331,274    3,331,274 
Paid in capital in excess of par                  3,134,722    3,134,722 
Accumulated (deficit)                            (5,940,923)  (5,991,097)

 Total stockholders' equity                         525,073      474,899 

TOTAL LIABILITIES AND 
 STOCKHOLDERS' EQUITY                           $   753,024    $ 743,769 


(1)  The restricted assets of 100% consolidated subsidiary, Dye
     Candy Company,  are $836,871 and $815,954 as of June 30,
     1997 and 1996, respectively.  See "Notes to Financial
     Statements" in Part II of this report for restrictions.

(2)  No cash dividends have been paid by the registrants' wholly-
     owned subsidiary, Dye Candy Company, during the past three
     fiscal years.





                           (Continued)

<PAGE>



                                                       SCHEDULE I
                                                      (Continued)


             CHASE GENERAL CORPORATION AND SUBSIDIARY
        CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT


                    CHASE GENERAL CORPORATION
                        (Registrant Only)
                CONDENSED STATEMENTS OF OPERATIONS
             Years Ended June 30, 1997, 1996 and 1995

                                             1997       1996       1995 
REVENUE

Equity in net income 
 of subsidiary                            $64,911    $82,358     $79,068 

    Total revenue                          64,911     82,358      79,068 

EXPENSE

 General and administrative                 4,892      8,294       6,617 
 Interest                                  13,998     16,214      17,718 

    Total expense                          18,890     24,508      24,335 

    Income before income 
      taxes                                46,021     57,850      54,733 

PROVISION (CREDIT) FOR
 INCOME TAXES                              (4,153)    (5,853)     (5,413)

NET INCOME                                $50,174    $63,703     $60,146 








                           (Continued)



<PAGE>



                                                       SCHEDULE I
                                                      (Continued)


             CHASE GENERAL CORPORATION AND SUBSIDIARY
        CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT


                    CHASE GENERAL CORPORATION
                        (Registrant Only)
                CONDENSED STATEMENTS OF CASH FLOWS
             Years Ended June 30, 1997, 1996 and 1995


                                             1997       1996        1995 

CASH FLOWS FROM OPERATING ACTIVITIES

 General and administrative 
    expenses paid                         $(4,892)   $(8,294)    $(6,617)
 Interest paid                            (16,214)   (17,718)    (18,693)
 Income tax refund received                 5,853      5,413       5,742 

    Net cash used in 
      operating activities                (15,253)   (20,599)    (19,568)

CASH FLOWS FROM INVESTING ACTIVITIES

 Advances received from 
   wholly owned subsidiary                 53,956     55,745      34,568 

CASH FLOWS FROM FINANCING ACTIVITIES

 Principal payments on 
   Series B notes payable                 (38,703)   (35,146)    (15,000)

NET DECREASE IN CASH AND
 CASH EQUIVALENTS                               -          -           - 

CASH AND CASH EQUIVALENTS,
 BEGINNING OF YEAR                              -          -           -      

CASH AND CASH EQUIVALENTS,
 END OF YEAR                              $     -    $     -     $     - 







                           (Continued)



<PAGE>


                                                       SCHEDULE I
                                                      (Continued)


             CHASE GENERAL CORPORATION AND SUBSIDIARY
        CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT


                    CHASE GENERAL CORPORATION
                        (Registrant Only)
                CONDENSED STATEMENTS OF CASH FLOWS
             Years Ended June 30, 1997, 1996 and 1995


                                             1997       1996        1995 

RECONCILIATION OF NET INCOME TO NET
 CASH USED IN OPERATING ACTIVITIES

 Net income                               $50,174    $63,703     $60,146 
 Adjustments to reconcile 
   net income to net cash
   used in operating 
   activities:
     Net income from wholly 
      owned subsidiary                    (64,911)   (82,358)    (79,068)
    Effects of changes in 
    operating assets and 
     liabilities:
       Accrued interest                    (2,216)    (1,504)       (975)
       Income tax refund 
        receivable                          1,700       (440)        329 

NET CASH USED IN 
OPERATING ACTIVITIES                     $(15,253)  $(20,599)   $(19,568)







     This information should be read only in connection with
     the accompanying independent auditor's report on
     supplemental schedules.


<PAGE>




                                                      SCHEDULE II




           CHASE GENERAL CORPORATION AND ITS SUBSIDIARY
                VALUATION AND QUALIFYING ACCOUNTS
                  June 30, 1997, 1996, and 1995


Column A                Column B     Column C      Column D     Column E
                                     Additions

                       Balance at   Charged to                   Balance
                       Beginning    Costs and                    at end 
Description            of Period     Expenses    Deductions*   of Period

Valuation 
accounts 
deducted from
assets to which 
they apply for
doubtful 
accounts 
receivable:

June 30, 
1997                     $12,757        $3,327        $3,370     $12,714

June 30, 
1996                      12,216         6,416         5,875      12,757

June 30, 
1995                      13,496        10,033        11,313      12,216


* Represents accounts written off, net of (recoveries), for the
respective years.






  This information should be read only in connection with
  the accompanying independent auditor's report on
  supplemental schedules.



<PAGE>



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                              CHASE GENERAL CORPORATION
                              (Registrant)


Date:  10/3/97                  By:  /s/ Barry M. Yantis
                                Barry M. Yantis, President


Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated below.

                           President, Treasurer (Principal
                           Executive Officer and Chief
                           Financial and Accounting Officer)
                           and Director
/s/ Barry M. Yantis
Barry M. Yantis                                Date:  10/3/97


                           Vice-President, Secretary and
                           Director
/s/ Brian A. Yantis
Brian A. Yantis                                Date:  10/3/97