Securities and Exchange Commission
Washington, D.C. 20549

Form 10-K

(X) Annual Report Pursuant to Section 13 or 15(d) of the 
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997

or

( )	Transition Report Pursuant to Section 13 or 15(d) of the 
Securities Exchange Act of 1934
For the transition period from _______________ to  
_________________          

Commission file number 0-11951

               JSCE, Inc.
(Exact name of registrant as specified in its charter)

    	Delaware		                       				37-1337160
State of incorporation           (I.R.S. Employer Identification)
or organization)                         

Jefferson Smurfit Centre
8182 Maryland Avenue
St. Louis, MO  	                            					  63105
(Address of principal executive offices)         (Zip Code)

Registrant's Telephone Number:  (314)  746-1100

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 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 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 the 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]

As of January 31, 1997, none of the registrant's voting stock was 
held by non-affiliates.

The number of shares outstanding of the registrant's common stock 
as of  January 31, 1998:     1,000

DOCUMENTS INCORPORATED BY REFERENCE:		       Part of Form 10-K
                                      										Into Which
                                      										Document is
		    Document	                           						Incorporated

Sections of  JSC's Proxy Statement for the
Annual Meeting of Stockholders to be held 
on May 7, 1998                          					     			III

JSCE, Inc.
Annual Report on Form 10-K
December 31, 1997


TABLE OF CONTENTS

PART I
        	                                                   Page
	
Item  1.	Business                                          	  1
Item  2.	Properties	                                          8
Item  3.	Legal Proceedings	                                   8 
Item  4.	Submission of Matters to a Vote of Security Holders	12

PART II

Item  5.	Market for Registrant's Common Equity and
        	Related Stockholder Matters	                        12
Item  6.	Selected Financial Data	                            13
Item  7.	Management's Discussion and Analysis of Financial
        	Condition and Results of Operations	                15
Item  8.	Financial Statements and Supplementary Data	        24
Item  9.	Changes in and Disagreements with Accountants
        	on Accounting and Financial Disclosure	             50

PART III

Item 10.	Directors and Executive Officers of the Registrant	 50
Item 11.	Executive Compensation	                             54
Item 12.	Security Ownership of Certain Beneficial 
         Owners and Management                              	54
Item 13.	Certain Relationships and Related Transactions     	54

PART IV

Item 14.	Exhibits, Financial Statement Schedules and 
         Reports on Form 8-K                                	55

PART I

Item 1.	Business

GENERAL

JSCE, Inc. together with its consolidated subsidiaries, 
hereinafter referred to as the Company or JSCE, operates in 
two business segments, Paperboard/Packaging Products and 
Newsprint.  The Company believes it is one of the nation's 
largest producers of paperboard and packaging products and is the 
largest producer of recycled paperboard and recycled packaging 
products and the largest processor of recovered paper.  In 
addition, the Company believes it is one of the nation's largest 
producers of recycled newsprint.

The Company's Paperboard/Packaging Products segment includes a 
system of paperboard mills that, in 1997, produced 1,933,000 tons 
of virgin and recycled containerboard, 823,000 tons of recycled 
boxboard and solid bleached sulfate (SBS) and 125,000 tons of 
uncoated recycled boxboard, which were sold to the Company's own 
converting operations and to third parties.  The Company's 
converting operations consist of 51 corrugated container plants, 
19 folding carton plants and 22 industrial packaging plants 
located across the country, with three plants located outside the 
U.S.  In 1997, the Company's container plants converted 2,047,000 
tons of containerboard, an amount equal to approximately 106% of 
the amount the Company produced, its folding carton plants 
converted 547,000 tons of SBS, recycled boxboard and coated 
natural kraft, an amount equal to approximately 66% of the amount 
it produced, and its industrial packaging plants converted 
149,000 tons of uncoated recycled boxboard, an amount equal to 
approximately 119% of the amount it produced.  The 
Paperboard/Packaging Products segment also includes the Company's 
reclamation facilities, which processed or brokered approximately 
4.8 million tons of recovered paper in 1997, its timber 
operations, which manage approximately one million acres of owned 
or leased timberland located close to its virgin fiber mills and 
10 consumer packaging plants.  The Company's Paperboard/Packaging 
Products segment contributed 91% of the Company's net sales in 
1997.

The Company's Newsprint segment includes two newsprint mills in 
Oregon, which produced 574,000 metric tons of recycled newsprint 
in 1997, and two facilities that produce Cladwood, a wood 
composite exterior siding, manufactured from sawmill shavings and 
newsprint.

For a summary of net sales, income from operations, identifiable 
assets, capital expenditures and depreciation, depletion and 
amortization for the Company's segments, see Note 13, "Business 
Segment Information" of the Notes to Consolidated Financial 
Statements contained in Part II, Item 8, "Financial Statements 
and Supplementary Data".

Except for the historical information contained in this Annual 
Report on Form 10-K, certain matters discussed herein, including 
(without limitation) under Part I, Item 1, "Business"
Environmental Compliance", under Part 1, Item 3, "Legal 
Proceedings" and under Part II, Item 7, "Management's Discussion 
and Analysis of Financial Condition and Results of Operations,"
contain forward looking statements, as that term is defined in 
the Private Securities Reform Act of 1995.  The matters referred 
to in such statements could be affected by the risks and 
uncertainties involved in the Company's business, including 
(without limitation) the effect of economic and market 
conditions, continued pricing pressures in key product lines, the 
level and volatility of interest rates and currency values, 
recovered paper prices, costs related to environmental matters 
and the impact of current or pending legislation and regulation.

JSCE, Inc. is a wholly-owned subsidiary of Jefferson Smurfit 
Corporation ("JSC").  JSC has no operations other than its 
investment in JSCE.  JSCE owns a 100% equity interest in 
Jefferson Smurfit Corporation (U.S.) ("JSC (U.S.)").  JSC (U.S.) 
has extensive operations throughout the United States.  JSCE has 
no operations other than its investment in JSC (U.S.).

PRODUCTS

PAPERBOARD/PACKAGING PRODUCTS SEGMENT

CONTAINERBOARD AND CORRUGATED SHIPPING CONTAINERS
The Company's containerboard operations are highly integrated.  
Tons of containerboard produced and converted for the last three 
years were:

                            		1997  	1996  	1995
		                           (Tons in thousands)
Containerboard
    Production              	1,933 	1,973 	1,905
   	Consumption	             2,047 	1,991 	1,925

The Company's mills produce a full line of containerboard, 
including unbleached kraft linerboard, mottled white linerboard 
and recycled and semi-chemical medium.  Unbleached kraft 
linerboard is produced at the Company's mills located in 
Fernandina Beach and Jacksonville, Florida and mottled white 
linerboard is produced at its Brewton, Alabama mill.  Recycled 
medium is produced at the Company's mills located in Alton, 
Illinois, Carthage, Indiana, and Los Angeles, California and 
semi-chemical medium is produced in Circleville, Ohio.  In 1997, 
the Company produced 1,127,000, 265,000, 423,000 and 118,000 tons 
of unbleached kraft linerboard, mottled white linerboard,  
recycled medium and semi-chemical medium, respectively.  The 
Company's sales of containerboard in 1997 were $648 million 
(including $382 million of intracompany sales).  Sales of 
containerboard to the Company's container plants are at market 
prices.

Corrugated shipping containers, manufactured from containerboard 
in converting plants, are used to ship such diverse products as 
home appliances, electric motors, small machinery, grocery 
products, produce, books, tobacco and furniture and for many 
other applications, including point of purchase displays.  The 
Company stresses the value-added aspects of its corrugated 
containers, such as labeling and multi-color graphics, to 
differentiate its products and respond to customer requirements.  
The Company's 51 container plants serve local customers and large 
national accounts and are located nationwide, generally in or 
near large metropolitan areas.  The Company's sales of corrugated 
shipping containers in 1997 were $1,236 million (including $97 
million of intracompany sales).  Total corrugated shipping 
container sales volumes for 1997, 1996 and 1995 were 31,702, 
30,022 and 29,382 million square feet, respectively.



RECYCLED BOXBOARD, SOLID BLEACHED SULFATE AND FOLDING CARTONS
The Company's recycled boxboard, SBS and folding carton 
operations are also integrated.  Tons of recycled boxboard and 
SBS produced and converted for the last three years were:

                         			1997  	1996	  1995
                     			    (Tons in thousands)
Recycled Boxboard and SBS
	Production	                 823   	774  	 773
	Consumption	                547   	521	   529 

The Company produces coated recycled boxboard at its mills 
located in Middletown, Ohio, Philadelphia, Pennsylvania, Santa 
Clara, California and Wabash, Indiana.  The Company produces 
uncoated recycled boxboard at its Los Angeles, California mill 
and SBS at its Brewton, Alabama mill.  In 1997, the Company 
produced 633,000 and 190,000 tons of recycled boxboard and SBS, 
respectively.  The Company's sales of recycled boxboard and SBS 
in 1997 were $418 million (including $173 million of intracompany 
sales).

The Company's folding carton plants offer a broad range of 
converting capabilities, including web and sheet lithographic, 
rotogravure and flexographic printing, laminating and a full line 
of structural and design graphics services.  The Company's 19 
facilities convert recycled boxboard and SBS into folding 
cartons.  Folding cartons are used primarily to protect 
customers' products while providing point of purchase 
advertising.  The Company makes folding cartons for a wide 
variety of applications, including food and fast foods, 
detergents, paper products, beverages, health and beauty aids and 
other consumer products.  Customers range from small local 
accounts to large national accounts.  The Company's folding 
carton plants are located nationwide, generally in or near large 
metropolitan areas.  The Company's sales of folding cartons in 
1997 were $659 million (including $3 million of intracompany 
sales).  Folding carton sales volumes for 1997, 1996 and 1995 
were 488,000, 474,000 and 476,000 tons, respectively.

The Company has focused its capital expenditures in these 
operations and its marketing activities to support a strategy of 
enhancing product quality as it relates to packaging graphics, 
increasing flexibility while reducing customer lead time and 
assisting customers in innovative package designs.

The Company provides marketing consultation and research 
activities through its Design and Market Research (DMR) center.  
It provides customers with graphic and product design tailored to 
the specific technical requirements of lithographic, rotogravure 
and flexographic printing, as well as photography for packaging, 
sales promotion concepts, and point of purchase displays.

UNCOATED RECYCLED BOXBOARD AND INDUSTRIAL PACKAGING
The Company's uncoated recycled boxboard and industrial packaging 
operations are also integrated.  Tons of uncoated recycled 
boxboard produced and converted for the last three years were:

                        			1997  	1996  	1995
                     			   (Tons in thousands)
Uncoated Recycled Boxboard
	Production               	 125   	128  	 120 
	Consumption              	 149   	153  	 148 



Uncoated recycled boxboard, a portion of which is used by the 
Company's industrial packaging operations, is produced at its 
mills located in Cedartown, Georgia, Lafayette, Indiana and 
Tacoma, Washington.  In 1997, the Company's sales of uncoated 
recycled boxboard were $49 million (including $29 million of 
intracompany sales).

The Company's 22 industrial packaging plants convert uncoated 
recycled boxboard into papertubes and cores.  Papertubes and 
cores are used primarily for paper, film and foil, yarn carriers 
and other textile products and furniture components.  The Company 
also produces solid fiber partitions for the pharmaceutical, 
electronics, glass, cosmetics and plastics industries.  In 
addition, the Company produces a patented self-locking partition 
especially suited for automated packaging and product protection.  
The Company also manufactures corrugated pallets that are made 
entirely from corrugated components and are lightweight yet 
extremely strong and are fully recyclable.  The Company's 
industrial packaging sales in 1997 were $115 million (including 
$6 million of intracompany sales).

CONSUMER PACKAGING
The Company manufactures a wide variety of products at its 10 
consumer products facilities.  These products include flexible 
packaging, paper and metallized paper labels and labels that are 
heat transferred to plastic containers for a wide range of 
industrial and consumer product applications.  The contract 
packaging plant provides a wide variety of custom contract 
packaging services including cartoning, bagging, liquid- or 
powder-filling and high-speed overwrapping.  The Company produces 
high-quality rotogravure cylinders and has a full-service 
organization experienced in the production of color separations 
and lithographic film for the commercial printing, advertising 
and packaging industries.  In 1997, sales of consumer packaging 
products and services were $152 million (including $7 million of 
intracompany sales).

FIBER RESOURCES AND TIMBER PRODUCTS
The raw materials essential to the Company's business are 
reclaimed fiber and virgin wood fiber.  The Brewton, Circleville, 
Jacksonville and Fernandina  Beach mills use primarily wood 
fibers, while the other paperboard mills use reclaimed fiber 
exclusively.  In 1997, the newsprint mills used approximately 44% 
wood fiber and 56% reclaimed fiber.

The Company operates 29 facilities that collect, sort, grade and 
bale recovered paper, as well as collect aluminum and glass. The 
Company also operates a nationwide brokerage system whereby it 
purchases and resells recovered paper (including recovered paper 
for use in its recycled fiber mills) on a regional and national 
contract basis.  Such contracts provide bulk purchasing, 
resulting in lower prices and cleaner recovered paper.  The 
reclamation operations provide valuable fiber resources to both 
the paperboard and newsprint segments of the Company as well as 
to other producers.  Many of the reclamation facilities are 
located close to the Company's recycled paperboard and newsprint 
mills, assuring availability of supply, when needed, with minimal 
shipping costs.  During 1997, the Company's reclamation plants 
and brokerage operations satisfied all of the Company's mill 
requirements for reclaimed fiber.  The Company's sales of 
recycled materials in 1997 were $446 million (including $155 
million of intracompany sales).



The amount of recovered paper collected and the proportions sold 
internally and externally by the Company for the last three years 
were:
                                     			1997  	1996  	1995
                                  			   (Tons in thousands)

Recovered paper collected             	4,832 	4,464 	4,293
	Percent sold internally              	 38.0%	 39.8%	 43.1%
	Percent sold to third parties	         62.0%  60.2%  56.9%

The Company manages approximately one million acres of owned and 
leased timberland in the southeastern United States. In 1997, the 
Company harvested 1,015,000 cords of timber, which would satisfy 
approximately 43% of the wood fiber requirements for its 
Jacksonville, Fernandina Beach and Brewton mills.    The 
Company's wood fiber requirements not satisfied internally are 
purchased on the open market or under long-term contracts.  In 
1997, the Company's sales of timber products were $269 million 
(including $204 million of intracompany sales).

NEWSPRINT SEGMENT

NEWSPRINT MILLS
The Company's Newsprint segment is operated by Smurfit Newsprint 
Corporation, a wholly-owned subsidiary of the Company ("SNC").  
SNC newsprint mills are located in Newberg and Oregon City, 
Oregon.   SNC produced 574,000, 522,000 and 563,000 metric tons 
of newsprint during 1997, 1996 and 1995, respectively.  In 1997, 
sales of newsprint were $283 million (including $2 million of 
intracompany sales).

For the past three years, an average of approximately 50% of 
SNC's newsprint production has been sold to The Times Mirror 
Company ("Times Mirror") pursuant to a long-term newsprint 
agreement (the "Newsprint Agreement") entered into in connection 
with the Company's acquisition of SNC from Times Mirror in 
February 1986.  Under the terms of the Newsprint Agreement, SNC 
supplies newsprint to Times Mirror generally at prevailing market 
prices.  Sales of newsprint to Times Mirror in 1997 amounted to 
$140 million.

CLADWOOD
Cladwood is a wood composite panel used by the housing industry, 
manufactured from sawmill shavings and other wood residuals and 
overlaid with recycled newsprint.  SNC has two Cladwood plants 
located in Oregon.  Sales for Cladwood in 1997 were $22 million 
(including $1 million of intracompany sales).  See also Part 1, 
Item 3, "Legal Proceedings."

MARKETING

The marketing strategy for the Company's mills is to maximize 
sales of products to manufacturers located within an economical 
shipping area.  The strategy in the converting plants focuses on 
both specialty products tailored to fit customers' needs and high 
volume sales of commodity products.  The Company also seeks to 
broaden the customer base for each of its segments rather than to 
concentrate on only a few accounts for each plant.  These 
objectives have led to decentralization of marketing efforts, 
such that each plant has its own sales force, and many have 
product design engineers, who are in close contact with customers 
to respond to their specific needs.  National sales offices are 
also maintained for customers who purchase through a centralized 
purchasing office.  National account business may be allocated to 
more than one plant because of production capacity and equipment 
requirements.

COMPETITION

The paperboard and packaging products markets as well as the 
newsprint markets are highly competitive and are comprised of 
many participants.  Although no single company is dominant, the 
Company does face significant competitors in each of its 
businesses.  The Company's competitors include large vertically 
integrated companies as well as numerous smaller companies.  The 
industries in which the Company competes are particularly 
sensitive to price fluctuations as well as other competitive 
factors including design, quality and service, with varying 
emphasis on these factors depending on product line.

BACKLOG

Demand for the Company's major product lines is relatively 
constant throughout the year and seasonal fluctuations in 
marketing, production, shipments and inventories are not 
significant.  The Company does not have a significant backlog of 
orders, as most orders are placed for delivery within 30 days.

RESEARCH AND DEVELOPMENT

The Company's research and development center uses state-of-the-
art technology to assist all levels of the manufacturing and 
sales processes from raw materials supply through finished 
packaging performance.  Research programs have provided 
improvements in coatings and barriers, stiffeners, inks and 
printing.  The technical staff conducts basic, applied and 
diagnostic research, develops processes and products and provides 
a wide range of other technical services.

The Company actively pursues applications for patents on new 
inventions and designs and attempts to protect its patents 
against infringement.  Nevertheless, the Company believes that 
its success and growth are dependent on the quality of its 
products and its relationships with its customers, rather than on 
the extent of its patent protection.  The Company holds or is 
licensed to use certain patents, but does not consider that the 
successful continuation of any important phase of its business is 
dependent upon such patents.

EMPLOYEES

The Company had approximately 15,800 employees at December 31, 
1997, of which approximately 10,600 employees (67%) were 
represented by collective bargaining units.  The expiration dates 
of union contracts for the Company's major facilities are as 
follows:  the Jacksonville mill, expiring June 1999; the Alton 
mill, expiring June 2000; SNC's Newberg mill, expiring March 
2002;  the Brewton mill, expiring October 2002;  the Fernandina 
mill, expiring June 2003; a group of 11 properties, including 4 
paper mills and 7 corrugated container plants, expiring June 
2003; and SNC's Oregon City mill, expiring March 2004.  The 
Company believes that its employee relations are generally good 
and is currently in the process of bargaining with unions 
representing production employees at a number of its other 
operations.

ENVIRONMENTAL COMPLIANCE

The Company's paperboard and newsprint mills are large consumers 
of energy, using either natural gas or coal.  A majority of the 
Company's total paperboard tonnage is produced by mills which 
have coal-fired boilers.  The cost of energy is dependent, in 
part, on environmental regulations  governing air emissions.

Because various pollution control standards are subject to 
change, it is difficult to predict with certainty the amount of 
capital expenditures that will ultimately be required to comply 
with future standards.  In particular, the United States 
Environmental Protection Agency ("EPA") has finalized significant 
parts of its comprehensive rule governing the pulp, paper and 
paperboard industry (the "Cluster Rule") which will require 
substantial expenditures to achieve compliance.  In order to 
comply with these parts of the Cluster Rule, the Company 
estimates that, based on preliminary engineering studies done to 
date, it may require approximately $175 million in capital 
expenditures over the next three to five years.  The ultimate 
cost of complying with the regulations cannot be predicted with 
certainty until further engineering studies are completed and 
additional regulations are finalized.    

In addition to Cluster Rule compliance, the Company also 
anticipates additional capital expenditures related to 
environmental compliance, although in the opinion of management, 
such compliance will not adversely affect the Company's 
competitive position.  For the past three years, the Company has 
spent an average of approximately $15 million annually on capital 
expenditures for environmental purposes.  The anticipated 
spending for such capital projects for fiscal 1998 is 
approximately $34 million.  A significant amount of the increased 
expenditures in 1998 will be due to compliance with the Cluster 
Rule and is included in the $175 million estimate referenced 
above.   Since the Company's competitors are, or will be, subject 
to comparable pollution standards, including the Cluster Rule, 
management is of the opinion that compliance with the pollution 
standards will not adversely affect the Company's competitive 
position.

ITEM 2.	PROPERTIES

The Company's properties at December 31, 1997 are summarized in 
the table below.  Approximately 62% of the Company's investment 
in property, plant and equipment is represented by its paperboard 
and newsprint mills.  In addition to its manufacturing 
facilities, the Company owns aproximately 820,000 acres and 
leases approximately 163,000 acres of timberland in the 
southeastern United States and also operates wood harvesting 
facilities.
				
		                               Number of Facilities       State
			                              Total 	Owned 	Leased     Locations
Paperboard mills:
	Containerboard mills	              7	     7	 	    0	        	 6
	Boxboard mills	                    4	     4	  	   0       	 	 4
	Uncoated recycled boxboard mills	  3	     3	  	   0	        	 3
Newsprint mills	                    2	     2	  	   0	        	 1
Reclamation plants	                29  	  21	  	   8        		13
Converting facilities:
	Corrugated container plants     	 51	    39 	 	  12        		21
	Folding carton plants	            19	    16	      3        		10
	Industrial packaging plants	      22	     7  		  15	        	15
Consumer packaging plants	         10	     5	  	   5	        	 6
Cladwood plants	                    2  	   2	  	   0        		 1
Wood product plants	                1 	    1	  	   0        		 1
	Total		                          150  	 107   	  43         	28 

ITEM 3.	LEGAL PROCEEDINGS

LITIGATION

On January 3, 1997, SNC was served in an action styled John and 
Peggy Woolum, et ano. v. Fleetwood Homes of Georgia, Inc. et al., 
No. 96-CP-08-2029 (South Carolina Court of Common Pleas).  The 
suit, which purports to be a class action on behalf of 5,000 or 
more present and past owners or Cladwood-containing mobile homes 
in South Carolina, alleges that Cladwood siding deteriorates when 
exposed to climate conditions found there.  The complaint seeks 
an unspecified amount of actual, statutory and punitive damages, 
which, in the aggregate, may exceed $100,000.  The Court has 
dismissed the Company from the action for lack of personal 
jurisdiction, which the other litigants may seek to appeal.

On July 1, 1997, SNC was served in an action entitled John 
Sechler and Hazel Sechler, et ano. v. Smurfit Newsprint 
Corporation, No. 1 97-CV-1870 (United States District Court, 
Northern District of Georgia).  The complaint alleges that 
Cladwood siding deteriorates under normal conditions and 
exposure.  The suit purports to be a nationwide class action on 
behalf of owners of Cladwood-containing manufactured homes or 
mobile homes.  The complaint alleges causes of action for breach 
of warranty and negligence and seeks an unspecified amount of 
actual, consequential and punitive damages, which, in the 
aggregate, may exceed $100,000.  On September 24, 1997, 
Plaintiffs voluntarily dismissed the action.  On October 15, 
1997, Plaintiffs refiled their action in state court, naming 
Fleetwood Homes of Georgia, Inc. and Fleetwood Enterprises, Inc. 
(mobile home manufacturers) as additional defendants.  On October 
24, 1997, the Company removed the state court action to federal 
court.  The second federal court action is styled John Sechler 
and Hazel Sechler, et ano. v. Smurfit Newsprint Corporation, et 
al., No. 1:97-CV-3201 (United States District Court, Northern 
District of Georgia).  On November 4, 1997, the Company filed a 
motion to dismiss the negligence and punitive damages claims.  
Plaintiffs have moved to add additional parties, amend the 
complaint, and remand the action back to state court.  The 
motions are currently before the court for its consideration.  
SNC intends to defend the action vigorously.

On August 8, 1997, JSC and SNC were served in an action entitled 
Carolyn Cave-Woods, et ano. v. Jefferson Smurfit Corporation, et 
al., No. 97-2-19958-1SEA (Washington Superior Court).  The suit, 
which purports to be a class action on behalf of all persons who 
own or have purchased or used Cladwood siding, alleges that 
Cladwood siding used in prefabricated or manufactured homes, 
deteriorates when exposed to moisture.  The complaint alleges 
unfair trade practices and breach of express warranty, and seeks 
an unspecified amount of actual and punitive damages, which, in 
the aggregate, may exceed $100,000.  The complaint also seeks 
declaratory and injunctive relief.  On January 2, 1998, 
Plaintiffs filed a motion seeking certification of a nationwide 
class.  The Company intends to oppose the class certification 
motion and defend the action vigorously.

On February 6, 1998, SNC was served in an action styled Jeffrey 
A. and Deborah Pross, et ano. v. Smurfit Newsprint Corporation et 
al., No. 9810069-24 (Georgia Superior Court).  The complaint 
alleges that Cladwood siding deteriorates under normal conditions 
and exposure.  The suit purports to be a class action on behalf 
of persons in the State of South Carolina whose manufactured 
homes or mobile homes have Cladwood siding.  The complaint 
alleges causes of action for breach of warranty and negligence 
and seeks an unspecified amount of actual, consequential and 
punitive damages, which in the aggregate may exceed $100,000.  
SNC intends to defend the action vigorously.

Management is unable to predict at this time the final outcome of 
these suits relating to Cladwood siding or whether the resolution 
of the matters could materially affect the Company's results of 
operations, cash flows or financial position.

The Company is a defendant in a number of other lawsuits which 
have arisen in the normal course of business.  While any 
litigation has an element of uncertainty, the management of the 
Company believes that the outcome of such suits will not have a 
material adverse effect on its financial condition or results of 
operations.

ENVIRONMENTAL MATTERS

Federal, state and local environmental requirements are a 
significant factor in the Company's business.  The Company 
employs processes in the manufacture of pulp, paperboard and 
other products, resulting in various discharges, emissions and 
reporting and disclosure obligations that are subject to numerous 
federal, state and local environmental control statutes, 
regulations and ordinances.  The Company operates and expects to 
operate under permits and similar authorizations from various 
governmental authorities that regulate such discharges, emissions 
and reporting and disclosure obligations.

Occasional violations have occurred from time to time at the 
Company's facilities, resulting in administrative actions, legal 
proceedings or consent decrees and similar arrangements.  Pending 
proceedings include the following:
	Sweet Home, Oregon	
On May 11, 1995, the EPA executed a search warrant at the 
Sweet Home, Oregon Cladwood manufacturing facility of SNC.  
According to the search warrant, the U.S. Attorney's office 
for the District of Oregon and the EPA are investigating 
whether this facility violated the Clean Water Act or other 
federal laws in connection with its waste water discharges.  
The Company has been advised that the government has 
presented evidence to a grand jury in connection with the 
investigation.  SNC and certain of its employees could be 
charged, and SNC could be assessed significant fines and 
penalties if an indictment and conviction follows as a result 
of the grand jury proceeding.

Philomath, Oregon
On May 13, 1996, SNC voluntarily self reported to the EPA and 
the Oregon Department of Environmental Quality ("ODEQ") 
possible violations of the Clean Water Act and other federal 
laws in connection with waste water discharges at its 
Cladwood facility located in Philomath, Oregon.  It is 
uncertain whether an investigation will be undertaken by 
ODEQ.

Miami County, Ohio Site
A criminal inquiry was commenced by the United States in 1993 
relating to the Company's responses to EPA's document and 
information requests in connection with a Comprehensive 
Environmental Response, Compensation and Liability Act 
("CERCLA") site located in Miami County, Ohio.  It is 
uncertain whether any criminal action will be forthcoming.

The Company also faces potential liability as a result of 
releases, or threatened releases, of hazardous substances into 
the environment from various sites owned and operated by third 
parties at which Company-generated wastes have allegedly been 
deposited.  Generators of hazardous substances sent to off-site 
disposal locations at which environmental problems exist, as well 
as the owners of those sites and certain other classes of persons 
(generally referred to as "potentially responsible parties" or 
"PRPs"), are, in most instances, subject to joint and several 
liability for response costs for the investigation and 
remediation of such sites under CERCLA and analogous state laws, 
regardless of fault or the legality of original disposal.  The 
Company has received notice that it is or may be a PRP at a 
number of federal and/or state sites where remedial action may be 
required, and as a result may have joint and several liability 
for cleanup costs at such sites.  However, liability of CERCLA 
sites is typically shared with the other PRPs and costs are 
commonly allocated according to relative amounts of waste 
deposited.  Because the Company's relative percentage of waste 
deposited at a majority of these sites is quite small, management 
of the Company believes that its probable liability under CERCLA, 
taken on a case by case basis or in the aggregate, will not have 
a material adverse effect on its financial condition or 
operations.  Pending CERCLA proceedings include the following:

	Operating Industries Site, Monterey Park, California
The Company has paid approximately $768,000 pursuant to two 
partial consent decrees entered into in 1991 and 1992 with 
the U.S. and the State of California with respect to cleanup 
obligations at the Operating Industries site in Monterey 
Park, California.  It is anticipated that there will be 
further remedial measures beyond those covered by these 
partial settlements.
	

	Kane & Lombard Site, Baltimore, Maryland
The Company entered into a consent decree with the U.S. and 
the State of Maryland in settlement of its obligations in 
connection with the Kane & Lombard Superfund Site in 
Baltimore, Maryland.  The Company paid approximately $171,500 
in 1995 as part of this settlement, and may be required to 
pay additional cleanup costs.

	Fisher-Calo Site, Kingsbury, Indiana
The Company entered into a consent decree in 1991 with the 
U.S. and the State of Indiana for the remediation of the 
Fisher-Calo Superfund Site in Kingsbury, Indiana.  To date, 
the Company has paid approximately $140,000 toward cleaning 
up the site.  The Company anticipates that some additional 
remediation of the site will be required.

	Lenz Oil Site, Lemont, Illinois
The Company has entered into consent decrees in 1988 and 1993 
with the EPA and the Illinois EPA for the investigation and 
initial remediation of the Lenz Oil Superfund Site in Lemont, 
Illinois.  The Company has paid approximately $80,000 toward 
this investigation and initial remediation.  It is 
anticipated that further remedial measures will be required 
beyond those covered in these consent decrees.

Augustine Mill Site, Wilmington, Delaware
In 1994, the Company entered into a consent decree with the 
State of Delaware regarding remedial investigation of the 
Augustine Mill site.  In 1997, the Company constructed a 
landfill cap to close the site in cooperation with the State.  
To date, the Company has spent approximately $2 million on 
the remediation, which is nearly completed.  The Delaware 
Parks Department will eventually assume responsibility for 
maintenance of the site as part of its Delaware Greenways 
program.	

	Jones Industrial Services Site, South Brunswick, New Jersey
	The Company entered into an administrative consent order in 
1997 with the State of New Jersey for the remediation of the 
Jones Industrial Services Site in South Brunswick, New 
Jersey.  To date, the Company has paid approximately $21,000 
toward the remedial investigation of this site.  The Company 
anticipates that it will pay additional investigation costs 
and cleanup costs at this site.

In addition to participating in remediation of sites owned by 
third parties, the Company has entered consent orders for 
remediation of two Company-owned properties.

Duval, County, Florida
In 1992, the Company entered into an administrative consent 
order with the Florida Department of Environmental Regulation 
("FDER") to carry out any necessary assessment and 
remediation of Company-owned property in Duval County, 
Florida.  The property was formerly the site of a sawmill 
that dipped lumber into a chemical solution.  To date, the 
Company has spent approximately $744,000 on remediating the 
site.  It is currently in a monitoring-only stage.

Jacksonville, Florida
In 1987, the Company entered into an administrative consent 
order with the FDER to conduct an assessment of the 
Jacksonville, Florida property site for potential impacts 
caused by previous industrial activity.  To date, the Company 
has paid approximately $2 million for remediation and 
investigation, and may incur some additional expense before 
closure of the site.

New Jersey Industrial Site Recovery Act
The New Jersey Industrial Site Recovery Act ("ISRA") requires 
owners or operators of "industrial establishments" to notify the 
New Jersey Department of Environmental Protection ("NJDEP") upon 
the closing of operations, or upon the transfer of ownership or 
operations of an industrial establishment.  As a precondition to 
the transfer of ownership or operations, an owner or operator of 
an industrial establishment is required to obtain a no further 
action letter from NJDEP, or NJDEP approval of a remedial action 
workplan or remediation agreement.  The Company currently is a 
signatory to a consent order with NJDEP with respect to an 
industrial establishment.  Management believes that any 
requirements that may be imposed by NJDEP with respect to the 
site will not have a material adverse effect on the financial 
condition or results of operations to the Company.

Management believes that the probable costs of the potential 
environmental enforcement matters discussed above, CERCLA 
response costs, remediation of owned property, and its New Jersey 
ISRA obligation will not have a material adverse effect on the 
Company's financial condition or results of operations.

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of the 
registrant during the fourth quarter of 1997.

PART II

ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED 
STOCKHOLDER MATTERS

MARKET INFORMATION
The Company is a wholly-owned subsidiary of JSC, and therefore, 
all of the outstanding common stock of the Company ("JSCE Common 
Stock") is owned by JSC.  As a result, there is no established 
public market for the JSCE Common Stock.

DIVIDENDS
The Company has not paid cash dividends on its common stock. The 
ability of the Company to pay dividends in the future is 
restricted by certain provisions contained in the 1994 Credit 
Agreement (as defined) and the indentures relating to the 
outstanding indebtedness of JSC (U.S.), which the Company 
guarantees.


ITEM 6. SELECTED FINANCIAL DATA
(In millions, except per share and statistical data)
                                	 	1997    	1996    	1995	    1994     1993
Summary of Operations
Net sales	                       $3,238	  $3,410	  $4,093  	$3,233  	$2,947	  
Cost of goods sold	               2,776	   2,754  	 3,222  	 2,719  	 2,567  
Gross profit                    	   462  	   656  	   871  	   514  	   380  
Selling and administrative expenses 258  	   265  	   241 	    223  	   239  
Restructuring charge					                                                96 
Environmental and other charges                                     	    54 
Income (loss) from operations   	   204  	   391  	   630  	   291 	     (9) 
Interest expense, net	             (190) 	  (194) 	  (234) 	  (266) 	  (253)
Other, net    	                      (2)	     (3)	      7 	      3 	      4  
Income (loss) before income taxes, 
	extraordinary item and cumulative
	effect of accounting changes	       12	     194 	    403 	     28  	  (258)
Provision for (benefit from) 
	income taxes	                       11	      77  	   156  	    16  	   (83) 
Income (loss) before 	     
	extraordinary item and cumulative
	effect of accounting changes	        1	     117 	    247 	     12 	   (175)
Extraordinary item
	Loss from early extinguishment 
	  of debt, net of income tax benefit    	    (5)	     (4)	    (55)	    (38)
Cumulative effect of accounting changes                     	      	    (16)
Net income (loss)               	$    1   	$  112 	 $  243 	$  (43) 	$ (229)

Other Financial Data
Net cash provided by operating 
	activities                     	$   88    $  380 	$  393 	$  134  	$   63  
Depreciation, depletion and 
	amortization	                      127	      125 	   122 	   116	     117   
Capital investments and
  acquisitions	                     191   	   129     170     152  	   102
Working capital	                     71	       34 	    51 	    15 	     44  
Property, plant, equipment and
	timberland, net	                 1,788	    1,720 	 1,709 	 1,681  	 1,631	  	  
Total assets                    	 2,771   	 2,688 	 2,783 	 2,759  	 2,597 
Long-term debt, less
 current maturities 	             2,025	    1,934 	 2,111 	 2,392  	 2,619 
Deferred income tax liability	      362	      363 	   328 	   208  	   232 
Stockholders' deficit	             (374)  	  (375)	  (487)	  (730) 	(1,058)

Statistical Data (tons in thousands)
Containerboard production (tons)	 1,933	    1,973	  1,905	  1,932	   1,840
Boxboard and SBS production (tons)	 823   	   774  	  773	    767	     744
Newsprint production (metric tons)  574   	   522	    563	    558	     558
Corrugated shipments
 (billion sq. ft.)	                31.7	     30.0	   29.4	   30.8	    29.4
Folding carton shipments (tons) 	   488	      474  	  476	    493  	   483   
Fiber reclaimed and
 brokered (tons)	                 4,832	    4,464  	4,293	  4,134  	 3,907
Timberland owned or leased
 	(thousand acres)	                 983	      987  	  984 	   985  	   984
Number of employees             	15,800	   15,800 	16,200 	16,600  	17,300


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

GENERAL
Market conditions and demand for containerboard, corrugated 
shipping containers and newsprint, three of the Company's most 
important products, are generally subject to cyclical changes in 
the economy and changes in industry capacity, both of which can 
significantly impact selling prices and the Company's 
profitability.  

Containerboard market conditions were weak from the second half 
of 1995 to early 1997 due to new capacity added within the 
industry. The added capacity resulted in excess inventories and 
lower selling prices for containerboard and corrugated shipping 
containers.  While demand for containerboard improved during this 
time, many paper companies, including the Company, took economic  
downtime at their containerboard mills to reduce inventories.  
Linerboard prices, which had reached a record high of $535 per 
ton in April 1995, dropped rapidly thereafter, declining to below 
$300 per ton in April 1997.  Improvements in market conditions 
during 1997, however, resulted in increases in containerboard 
prices in the second half of 1997.  In December 1997, the price 
of linerboard had risen to approximately $390 per ton.

Demand for newsprint was strong throughout 1995, but was weaker 
in 1996 due to reductions in ad lineage and conservation measures 
taken by newspaper publishers.  Strong demand for newsprint 
during 1995 resulted in an all-time record price of approximately 
$760 per metric ton in October 1995.  As market conditions 
weakened in 1996, excess inventories developed and selling prices 
for newsprint fell to below $500 per metric ton in the first 
quarter of 1997.  Many newsprint producers, including the 
Company, took economic downtime at their newsprint mills during 
1996 to reduce inventories.  Improvement in newsprint demand in 
1997, coupled with an extended strike at a competitor's mills, 
resulted in a reduction in the excess inventory levels and 
provided an opportunity to raise prices.  Two attempts to raise 
prices during 1997 were successful and by December 1997, 
newsprint prices had risen to approximately $605 per metric ton.

Reclaimed fiber is a major product of the Company and an 
important raw material of the Company's recycled paper mills.  
Due to increases in demand, the price of recycled fiber increased 
dramatically during the early part of 1995, resulting in higher 
costs at the Company's recycled paper mills.  However, the price 
of this material was lower in the second half of 1995 and 
remained relatively stable in 1996 due to lower demand as a 
result of significant downtime taken by recycled paper mills 
throughout the country.  The lower prices in 1996 had a 
beneficial effect on fiber cost at the Company's recycled paper 
mills as compared to 1995.  Reclaimed fiber prices were higher in 
1997, but were still well below the record highs set in 1995.

Results of Operations

Segment data
(In millions)           1997                1996                  1995
                             Income              Income               Income
                    Net       from       Net      from        Net      from
		                sales   operations   sales  operations    sales   operations  
Paperboard/
	Packaging 
	Products	       $2,936     	$177    	$3,087	    $335	     $3,706	     $604		 
Newsprint        	  302      	 27	       323	      56      	  387      	 26	
 Total	          $3,238     	$204    	$3,410    	$391	     $4,093     	$630

1997 COMPARED TO 1996
Net sales and income from operations declined in 1997 compared to 
1996, due primarily to lower sales prices.  Net sales were $3,238 
million, a decrease of 5% compared to 1996 and income from 
operations was $204 million, a decrease of 48% compared to 1996.  

(In millions)                                   1997 Compared to 1996
                                          Paperboard/
                                           Packaging
                                           Products    Newsprint     Total 
Increase (decrease) due to:
	Sales prices and product mix              	$(234)     	$ (59)   	$ (293)
	Sales volume		                                85      	   38	       123  
	Acquisitions and new facilities	              28 	               	   28  
	Sold or closed facilities	                   (30)                	  (30)
Total net sales decrease		                  $(151)     	$ (21)    	$(172)

Paperboard/Packaging Products Segment
Net sales of the Paperboard/Packaging Products segment decreased 
5% compared to 1996 to $2,936 million, and income from operations 
decreased $158 million compared to 1996 to $177 million.  The 
decrease in net sales of this segment was primarily a result of 
significant reductions in sales prices for containerboard and 
corrugated shipping containers.  Increases in sales volume 
partially offset the decline due to price. Profitability for this 
segment declined in 1997 compared to 1996 also due primarily to 
the sales price declines. Income from operations as a percent of 
net sales for the Paperboard/Packaging Products segment decreased 
from 11% in 1996 to 6% in 1997.  The changes in net sales price 
and shipments within the major product groups of the 
Paperboard/Packaging Products segment are discussed below.

Net sales of containerboard and corrugated shipping containers 
declined $192 million to $1,405 million, a decrease of 12% 
compared to 1996.  The decrease was due primarily to lower 
prices.  On average, corrugated shipping container prices 
decreased 13% and containerboard prices decreased 13% compared to 
1996.  Demand for corrugated shipping containers was strong 
throughout 1997 and shipments of corrugated shipping containers 
increased 6% compared to 1996. As market conditions improved, the 
Company successfully implemented two price increases for 
linerboard, the first in August for $40 per ton and the second in 
October for $50 per ton.  Containerboard sales volume in 1997 
decreased 2% compared to 1996 due to economic downtime taken to 
reduce inventories in 1997 and a shutdown at the Company's 
Brewton, Alabama mill associated with a rebuild and upgrade of 
its mottled white paper machine.

Net sales for the reclamation and timber products operations 
increased $75 million to $356 million, an increase of 27% 
compared to 1996.  On average, prices for reclaimed fiber were 
17% higher in 1997 compared to 1996 and shipments of reclaimed 
fiber increased 8% compared to 1996.

Net sales of recycled boxboard, SBS and folding cartons of $901 
million were equal to 1996.  On average, recycled boxboard and 
SBS prices decreased 5% and 2%, respectively, and folding carton 
prices decreased 5% compared to 1996.  Strengthening demand 
during 1997 enabled the Company to implement a $40 per ton price 
increase in the fourth quarter of 1997.  Shipments of recycled 
boxboard and SBS increased 6% and 2%, respectively, and folding 
carton shipments increased 3% compared to 1996.

Net sales of $129 million for uncoated recycled boxboard and 
industrial packaging products were 10% lower compared to 1996, 
primarily due to lower prices and plant closures.  Net sales of 
$145 million for consumer packaging products declined 12% 
compared to 1996 due to lower prices, reduced sales volume and 
the sale of a facility.

Newsprint Segment
Net sales of the Newsprint segment decreased 7% compared to 1996 
to $302 million, and income from operations decreased $29 million 
compared to 1996 to $27 million.  Strengthening demand for 
newsprint enabled SNC to successfully implement two price 
increases totaling $115 per metric ton in 1997.  Despite the 
increases, the average sales price for 1997 was 15% lower when 
compared to 1996.  Sales volume increased 12% compared to 1996 
primarily as a result of reduced mill downtime.  Income from 
operations as a percent of net sales decreased from 17% in 1996 
to 9% in 1997 due primarily to the decline in the average sales 
price of newsprint.

Costs and Expenses
Cost of goods sold as a percent of net sales increased from 81% 
in 1996 to 86% in 1997 due primarily to the lower sales prices 
explained above, and, to a lesser extent, higher recycled fiber 
cost and downtime taken at containerboard mills.  Selling and 
administrative expenses as a percent of net sales was comparable 
to 1996 due to a decline in expenses, which resulted primarily 
from lower employee benefit costs.

During 1997, the Company completed its 1993 restructuring 
program.  All major activity related to plant closures, workforce 
reductions, severance payments and asset sales were completed 
without significant adjustment to the reserve.  Cash payments for 
restructuring activity in 1997 were not significant to cash 
flows.

In the fourth quarter of 1995, SNC recorded a pre-tax charge 
totalling $25 million related to a corrective action program to 
address product quality matters and failure to follow proper 
manufacturing and internal procedures relating to production of 
exterior siding, a non-core product line of SNC.  The program was 
substantially completed in 1997.  The Company believes the 
remaining reserve is adequate to address expenditures 
contemplated under the corrective action program.

Interest expense for 1997 declined $4 million compared to 1996 
due primarily to lower average debt levels outstanding and lower 
effective interest rates.

The provision for income taxes in 1997 was $11 million.  The 
effective tax rate for 1997 exceeded the federal statutory tax 
rate due to several factors, the most significant of which was 
the effect of permanent differences from applying purchase 
accounting.  The tax values of remaining net operating loss 
carryforwards for state income tax purposes of approximately $45 
million expire in years 1998 through 2012.    Federal income tax 
returns for 1989 through 1994 are currently under examination.  
While the ultimate results of such examinations cannot be 
predicted with certainty, the Company's management believes that 
the examinations will not have a material adverse effect on its 
financial condition or results of operations.

1996 COMPARED TO 1995
Net sales and income from operations declined in 1996 compared to 
record levels in 1995, due primarily to lower sales prices.  Net 
sales were $3,410 million, a decrease of 17% compared to 1995 and 
income from operations was $391 million, a decrease of 38% 
compared to 1995.                                    

(In millions)                                1996 Compared to 1995
                                          Paperboard/
                                           Packaging
                                           Products    Newsprint     Total 
Increase (decrease) due to:
	Sales prices and product mix              	$(699)    	$ (30)     	$ (729)
	Sales volume		                               117 	      (34)     	    83  
	Acquisitions and new facilities	               4                  	    4  
	Sold or closed facilities	                   (41)                 	  (41)
Total net sales decrease	                  	$(619)    	$ (64)      	$(683)

Paperboard/Packaging Products Segment
Net sales of the Paperboard/Packaging Products segment decreased 
17% compared to 1995 to $3,087 million, and income from 
operations decreased $269 million compared to 1995 to $335 
million.  The decrease in net sales of this segment was primarily 
a result of significant reductions in sales prices for 
containerboard, corrugated shipping containers and reclamation 
products.  Increases in volume partially offset the decline in 
net sales.   Profitability for this segment declined in 1996 
compared to 1995 primarily due to the sales price declines, 
although the lower fiber prices resulted in lower cost in the 
Company's paperboard mills.  Income from operations as a percent 
of net sales for the Paperboard/Packaging Products segment 
decreased from 16% in 1995 to 11% in 1996.  The changes in net 
sales price and shipments within the major product groups of the 
Paperboard/Packaging Products segment are discussed below.

Net sales of containerboard and corrugated shipping containers 
declined $363 million to $1,597 million, a decrease of 19% 
compared to 1995.  On average, corrugated shipping container 
prices decreased 16% and containerboard prices decreased 28% 
compared to 1995.  On the other hand, shipments of corrugated 
shipping containers increased 2% and shipments of containerboard 
increased 4% compared to 1995.  Shipments of containerboard were 
higher primarily as a result of reduced mill downtime in 1996 as 
compared to 1995.

Net sales for the reclamation and timber products operations 
decreased $222 million to $281 million, a decrease of 44% 
compared to 1995.  The decrease was due primarily to lower 
average prices for reclaimed fiber, which declined 54% compared 
to 1995.  Shipments of reclaimed fiber increased 4% compared to 
1995.

Net sales of recycled boxboard, SBS and folding cartons were $901 
million, a decrease of 2% compared to 1995.  On average, recycled 
boxboard and SBS prices decreased 14% and 7%, respectively, and 
folding carton prices decreased 3% compared to 1995.  Shipments 
of recycled boxboard and SBS increased 3% and 5%, respectively, 
and folding carton shipments decreased 1% compared to 1995.

Net sales of $144 million for uncoated recycled boxboard and 
industrial packaging products were 7% lower compared to 1995, 
primarily due to lower prices.  Net sales of consumer packaging 
products declined 1% compared to 1995 to $164 million.

Newsprint Segment
Net sales of the Newsprint segment decreased 17% compared to 1995 
to $323 million, and income from operations increased $30 million 
compared to 1995 to $56 million.  The decrease in net sales was a 
result of sales prices, which, on average, dropped 8% compared to 
1995, and lower shipments due to production curtailment.  
Shipments of newsprint were lower in 1996 by 8% compared to 1995.  
The impact of reduced sales prices and lower sales volume on 
profitability of the segment was partially offset by lower fiber 
cost. This segment's 1995 profitability was also impacted by a 
$25 million pretax charge for anticipated cost related to the 
exterior siding issue discussed above.  Income from operations as 
a percent of net sales increased from 7% in 1995 to 17% in 1996.

Costs and Expenses
Cost of goods sold as a percent of net sales increased from 79% 
in 1995 to 81% in 1996 for the reasons explained above.  Selling 
and administrative expenses as a percent of net sales increased 
from 6% in 1995 to 8% in 1996 due primarily to overall lower 
sales prices, higher personnel costs and inflationary increases 
in other costs.

In 1996, major activities relating to the 1993 restructuring 
program included payments of plant closure expenditures and 
severance of $6 million, offset by proceeds from sales of fixed 
assets of $3 million.  Proceeds from sales of fixed assets were 
used to offset additional expenses and other unanticipated 
expenses related to shutdowns.  

At December 31, 1995, the Company decreased its weighted average 
discount rate in measuring its pension obligations from 8.5% to 
7.25% and its rate of increase in compensation levels from 5.0% 
to 4.0%.  In addition, the Company changed its expected long-term 
rate of return on assets from 10.0% to 9.5% at December 31, 1995. 
The net effect of changing these assumptions increased the 
projected benefit obligation at December 31, 1995 and increased 
pension cost in 1996 by approximately $14 million.

Interest expense for 1996 declined $40 million compared to 1995 
due primarily to lower average debt levels outstanding and lower 
effective interest rates.

The provision for income taxes in 1996 was $77 million compared 
to $156 million in 1995.  The Company's effective tax rate of 
39.7% in 1996 was comparable to the 1995 effective tax rate of 
38.7%.  In 1996 the Company utilized its net operating loss 
carryforwards for federal income tax purposes.  As of December 
31, 1996, the Company had net operating loss carryforwards for 
state income tax purposes of approximately $44 million which 
expire in years 1997 through 2009.

The Company adopted Statement of Financial Accounting Standards 
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived 
Assets and for Long-Lived Assets to be Disposed Of", in the first 
quarter of 1996.  The effect of such adoption was not material to 
the Company's financial statements. The Company also adopted the 
disclosure-only provisions of SFAS No. 123, "Accounting for 
Stock-Based Compensation" in 1996.  During 1996, the Company 
elected to early adopt the provisions of the American Institute 
of Certified Public Accountants Statement of Position ("SOP") 96-
1, "Environmental Remediation Liabilities".  The effect of 
adopting the provisions of SOP 96-1 was immaterial to the 
Company's financial statements.

LIQUIDITY AND CAPITAL RESOURCES

General
Operating activities have historically been the major source of 
cash to fund the Company's capital expenditures and debt 
payments.  Net cash provided by operating activities for 1997 of 
$88 million and net borrowings of $87 million were used primarily 
to fund capital investments and acquisitions totaling $191 
million.  Acquisitions in 1997 included a corrugated shipping 
container plant and three recycling plants.  In addition, the 
Company purchased a 50,000 acre woodlands tract that complements 
its southern holdings.   

As of December 31, 1997, JSC (U.S.)'s bank credit facility (the 
"1994 Credit Agreement") consisted of a Tranche A Term Loan of 
$312 million, a Tranche B Term Loan of $283 million, a Tranche C 
Term Loan of $141 million and a $450 million revolving credit 
facility.  The revolving credit facility may include letters of 
credit of up to $150 million.  The 1994 Credit Agreement contains 
various business and financial covenants including, among other 
things, (i) limitations on dividends, redemptions and repurchases 
of capital stock, (ii) limitations on the incurrence of 
indebtedness, liens, leases and sale-leaseback transactions, 
(iii) limitations on capital expenditures, (iv) maintenance of 
minimum levels of consolidated earnings before depreciation, 
interest, taxes and amortization, and (v) maintenance of minimum 
interest coverage ratios.  In view of the economic downturn 
within the Company's business in the early part of 1997, the 
Company sought an amendment to the 1994 Credit Agreement to ease 
certain of its financial covenants.  The amendment to the 1994 
Credit Agreement was granted in June 1997.  The 1994 Credit 
Agreement also requires prepayments if JSC (U.S.) has excess cash 
flows, as defined, or receives proceeds from certain asset sales, 
insurance, issuance of equity securities or incurrence of certain 
indebtedness.  Such restrictions, together with the highly 
leveraged position of the Company, could restrict corporate 
activities including the Company's ability to respond to market 
conditions, to provide for unanticipated capital expenditures or 
to take advantage of business opportunities.

As referenced above, the 1994 Credit Agreement imposes an annual 
limit on future capital expenditures of $150 million.  The 
capital spending limit is subject to increase in any year by an 
amount equal to a portion of the Company's excess cash flow and 
an amount up to $75 million if the prior year's spending was less 
than the maximum amount allowed.  The Company has a carryover of 
approximately $41 million for 1998.  The Company does not believe 
the annual limitation for capital expenditures impairs its plans 
for maintenance, expansion and continued modernization of its 
facilities.

The Company expects internally generated cash flows and existing 
financing resources will be sufficient for the next several years 
to meet its needs to pay interest, pay income taxes, pay debt 
maturities and fund capital expenditures.  Scheduled debt 
payments in 1998 and 1999 are $15 million and $101 million, 
respectively, with increasing amounts thereafter.  Capital 
expenditures for 1998 are estimated to be lower, comparable to 
the levels in 1996 and 1995.  The Company expects to use any 
excess cash provided by operations to make further debt 
reductions.  At December 31, 1997, the Company had $270 million 
of unused borrowing capacity under its 1994 Credit Agreement and 
$103 million of unused borrowing capacity under its $315 million 
accounts receivable securitization program, subject to JSC 
(U.S.)'s level of eligible accounts receivable.

The Company has received a commitment letter dated February 16, 
1998 from certain of its senior lenders and their affiliates to 
provide, structure, arrange and syndicate $1.3 billion of new 
senior secured facilities to refinance all of the outstanding 
indebtedness under the 1994 Credit Agreement.  The refinancing is 
expected to reduce interest expense, extend debt maturities and 
improve financial flexibility of the Company.  The refinancing is 
expected to close in the first half of 1998 and will result in a 
non-cash extraordinary write-off consisting primarily of deferred 
debt issuance costs related to the 1994 Credit Agreement.

The Company's earnings are significantly affected by the amount 
of interest on its indebtedness.  The Company periodically enters 
into interest rate swap and cap agreements to manage interest 
rate exposure on its indebtedness.  Management's objective is to 
protect the Company from interest rate volatility and reduce or 
cap interest expense within acceptable levels of risk.  As of 
December 31, 1997, the Company had no interest rate swaps or cap 
agreements outstanding.

JSC and SNC have been served with complaints alleging that 
Cladwood exterior siding, produced by SNC and used in 
prefabricated or manufactured homes, deteriorates under normal 
conditions and exposure.  The suits purport to be class actions 
on behalf of  persons who own or have purchased or used Cladwood, 
a non-core product line of SNC.  The complaints allege either 
negligence, unfair trade practices or breach of warranty, and 
seek unspecified amounts of damages and in one case declaratory 
and injunctive relief.  Management is unable to predict at this 
time the final outcome of these suits or whether the resolution 
of the matters could materially affect the Company's results of 
operations, cash flows or financial position.  The Company and 
SNC intend to defend the actions vigorously. 

The Company has conducted a review of its computer systems to 
identify areas that could be affected by the "Year 2000" issue.  
Based on this review, the Company has established a plan and has 
begun to modify or replace certain portions of its existing 
software so that the systems will function properly with respect 
to dates in the year 2000 and thereafter.  The modifications to 
existing software are expected to be completed by the end of 
1998.  The Company believes that the cost of such modifications 
will be immaterial to its results of operations and cash flows.  
The Company, in the ordinary course of business, continually 
seeks to upgrade its computer systems and software when 
economically practical and benefits can be achieved.  Appropriate 
cost associated with such systems are normally capitalized when 
purchased and depreciated over five years.  The Company has 
reviewed the systems that it is currently in the process of 
installing and believes these new systems will be Year 2000 
compliant.   The Company expects to do extensive testing of these 
new systems during 1998 and 1999.

The Company believes that, in general, it does not have a 
material exposure to the Year 2000 issue, either operationally or 
financially, and that its plan to modify or replace its software 
will address the Year 2000 issue on a timely basis.

Environmental Matters

In 1993, the Company recorded a provision of $54 million, of 
which $39 million related to environmental matters, representing 
asbestos and PCB removal, solid waste cleanup at existing and 
former operating sites and expenses for response costs at various 
sites where the Company has received notice that it is a PRP.  
The Company made payments of approximately $5 million, $3 million 
and $9 million related to PRP sites, environmental cleanup and 
other environmental compliance related measures in 1997, 1996 and 
1995, respectively.  The Company, as well as other companies in 
the industry, faces potential environmental liability related to 
various sites at which hazardous wastes have allegedly been 
deposited.  The Company has received notice that it is or may be 
a PRP at a number of federal and state sites where remedial 
action may be required.  Because the laws that govern the cleanup 
of waste disposal sites have been construed to authorize joint 
and several liability, government agencies or other parties could 
seek to recover all response costs for any site from any one of 
the PRPs for such site, including the Company, despite the 
involvement of other PRPs.  Although the Company is unable to 
estimate the aggregate response costs in connection with the 
remediation of all sites, if the Company were held jointly and 
severally liable for all response costs at some or all of the 
sites, it would have a material adverse effect on the financial 
condition and results of operations of the Company.  However, 
joint and several liability generally has not in the past been 
imposed on PRPs, and, based on such past practice, the Company's 
past experience and the financial conditions of other PRPs with 
respect to the sites, the Company does not expect to be held 
jointly and severally liable for all response costs at any site.  
Liability at waste disposal sites is typically shared with other 
PRPs and costs generally are allocated according to relative 
volumes of waste deposited at a given site.  At most sites, the 
waste attributed to the Company is a very small portion of the 
total waste deposited at the site (generally significantly less 
than 1%).  There are approximately six sites where final 
settlement has not been reached and where the Company's potential 
liability is expected to exceed de minimis levels.  See Part I, 
Item 3, "Legal Proceedings - Environmental Matters" for a 
discussion of the environmental exposure at the six sites subject 
to pending CERCLA proceedings.  Accordingly, the Company believes 
that its estimated total probable liability for response costs at 
the sites was adequately reserved at December 31, 1997.  Further, 
the estimate takes into consideration the number of other PRPs at 
each site, the identity and financial position of such parties, 
in light of the joint and several nature of the liability, but 
does not take into account possible insurance coverage or other 
similar reimbursement.

In 1997, the EPA finalized significant parts of the Cluster Rule, 
which will require substantial expenditures to achieve 
compliance.  In order to comply with these parts of the Cluster 
Rule, the Company estimates that, based on preliminary 
engineering studies done to date, it may require approximately  
$175 million in capital expenditures over the next three to five 
years.  The ultimate cost of complying with the regulations 
cannot be predicted with certainty until further engineering 
studies are completed, and additional regulations are finalized.

Compliance with federal, state and local environmental 
requirements is a significant, on-going factor in the Company's 
business.  It is difficult to predict with certainty the amount 
of capital expenditures that will be required to comply with 
future standards.  The Company has averaged $15 million annually 
in capital expenditures related to environmental compliance over 
the last three years and estimates spending approximately $34 
million in capital expenditures related to environmental 
compliance in 1998.  A significant amount of the increased 
expenditures in 1998 will be due to compliance with the Cluster 
Rule and is included in the $175 million estimate referenced 
above.  Since the Company's competitors are, or will be, subject 
to comparable pollution standards, including the proposed Cluster 
Rule, management is of the opinion that compliance with future 
pollution standards will not adversely affect the Company's 
competitive position.

Effects of Inflation

The Company uses the last-in, first-out method of accounting for 
approximately 83% of its inventories.  Under this method, the 
cost of products sold reported in the financial statements 
approximates current costs and thus provides a closer matching of 
revenue and expenses in periods of increasing costs. In early 
1995, the cost of many of the Company's base raw materials 
increased significantly due to strong demand and tight supply 
factors.  During this period, the Company was able to increase 
selling prices, effectively offsetting the effects of the 
increased cost.  During the latter part of 1995 and early 1996, 
the cost of such base raw materials declined and has remained 
relatively stable through 1996 and 1997.  Inflationary increases 
in other operating costs were moderate, and did not have a 
material impact on the Company's financial position or operating 
results.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA          	Page No.

Index to Financial Statements:

	Management's Responsibility for Financial Statements	            25
	Report of Independent Auditors                                  	26
	Consolidated balance sheets -  December 31, 1997 and 1996	       27	
	For the years ended December 31, 1997, 1996 and 1995:
		Consolidated statements of operations	                          28
		Consolidated statements of stockholders' deficit	               29
		Consolidated statements of cash flows	                          30
	Notes to consolidated financial statements	                      31

The following consolidated financial statement schedule of JSCE, 
Inc. is included in Item 14(a):

	II: Valuation and Qualifying Accounts 	                          59

All other schedules specified under Regulation S-X for JSCE, 
Inc. have been omitted because they are not applicable, because 
they are not required or because the information required is 
included in the financial statements or notes thereto.


MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of the Company is responsible for the information 
contained in the consolidated financial statements and in other 
parts of this report.  The consolidated financial statements have 
been prepared by the Company in accordance with generally 
accepted accounting principles appropriate in the circumstances, 
and necessarily include certain amounts based on management's 
best estimate and judgment.

The Company maintains a system of internal accounting control, 
which it believes is sufficient to provide reasonable assurance 
that in all material respects transactions are properly 
authorized and recorded, financial reporting responsibilities are 
met and accountability for assets is maintained.  In establishing 
and maintaining any system of internal control, judgment is 
required to assess and balance the relative costs and expected 
benefits.  Management believes that through the careful selection 
of employees, the division of responsibilities and the 
application of formal policies and procedures, the Company has an 
effective and responsive system of internal accounting controls.  
The system is monitored by the Company's staff of internal 
auditors, who evaluate and report to management on the 
effectiveness of the system.

The Audit Committee of the Board of Directors is composed of four 
directors who meet with the independent auditors, internal 
auditors and management to discuss specific accounting, reporting 
and internal control matters.  Both the independent auditors and 
internal auditors have full and free access to the Audit 
Committee.


Richard W. Graham
President and Chief Executive Officer


Patrick J. Moore
Vice President and Chief Financial Officer
(Principal Accounting Officer)


REPORT OF INDEPENDENT AUDITORS

Board of Directors
JSCE, Inc.

We have audited the accompanying consolidated balance sheets of 
JSCE, Inc. as of December 31, 1997 and 1996, and the related 
consolidated statements of operations, stockholders' deficit and 
cash flows for each of the three years in the period ended 
December 31, 1997.  Our audits also included the financial 
statement schedule listed in the Index at Item 14(a).  These 
financial statements and schedule are the responsibility of the 
Company's management.  Our responsibility is to express an 
opinion on these financial statements and schedule 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 financial statements referred to above 
present fairly, in all material respects, the consolidated 
financial position of JSCE, Inc. at December 31, 1997 and 1996, 
and the consolidated results of its operations and its cash flows 
for each of the three years in the period ended December 31, 1997 
in conformity with generally accepted accounting principles.  
Also, in our opinion, the related financial statement schedule, 
when considered in relation to the basic financial statements 
taken as a whole, presents fairly, in all material respects, the 
information set forth therein.


Ernst & Young LLP


St. Louis, Missouri
January 22, 1998


JSCE, Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)

December 31,		                                					1997   			1996

		      ASSETS
Current assets
	Cash and cash equivalents                     	$    12  	$    12
	Receivables, less allowances of 
		$10 in 1997 and $9 in 1996    	                   302      	279
	Inventories
		Work-in-process and finished goods	                89       	81
		Materials and supplies	                           151	      126
			                                                 240      	207
	Deferred income taxes                              	32       	46
	Prepaid expenses and other current assets	          16   	    15
		      Total current assets	                       602      	559

Net property, plant and equipment                	1,523	    1,466

Timberland, less timber depletion	                  265      	254

Goodwill, less accumulated amortization of
	$58 in 1997 and $50 in 1996                       	237      	246
Other assets                                    	   144   	   163
	                                             		$ 2,771  	$ 2,688

LIABILITIES AND STOCKHOLDER'S DEFICIT 
Current liabilities
	Current maturities of long-term debt          	$    15  	$    10
	Accounts payable                                  	334      	290
	Accrued compensation and payroll taxes             	88       	92
	Interest payable                                   	25       	30
	Other accrued liabilities	                          69	      103
		      Total current liabilities	                  531      	525

Long-term debt, less current maturities	          2,025    	1,934

Other long-term liabilities                        	227      	241

Deferred income taxes                              	362      	363

Stockholder's deficit
	Common stock, par value $.01 per share;
		1,000 shares authorized and outstanding
	Additional paid-in capital                      	1,102	    1,102
	Retained earnings (deficit)                    	(1,476)	  (1,477)
	     Total stockholder's deficit	                 (374)  	  (375)
		                                             	$ 2,771  	$ 2,688

See notes to consolidated financial statements.

JSCE, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions)


Year Ended December 31,                     	1997    	1996   	 1995 


Net sales                                 	$3,238  	$3,410  	$4,093
Costs and expenses	
	Cost of goods sold                        	2,776   	2,754	   3,222
	Selling and administrative expenses 	        258	     265	     241
			
		Income from operations                     	204	     391     	630
			
Other income (expense)	
	Interest expense, net                      	(190)   	(194)   	(234)
	Other, net	                                   (2)	     (3)	      7
			
		Income before income taxes and	
		   extraordinary item                       	12     	194     	403
			
Provision for income taxes                 	   11   	   77   	  156
			
		Income before extraordinary item             	1     	117     	247
			
Extraordinary item	
	Loss from early extinguishment of debt,	
		net of income tax benefit of $3 in 1996, 	
		and $2 in 1995                              	     	   (5)  	   (4)
			
			
		Net income                              	$    1   $  112   $  243

See notes to consolidated financial statements.

JSCE, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT
(In millions, except share data)

                            		  Common Stock  
                              		Par    	Number  	 Additional 	Retained
                             		Value    	 of      	Paid-In   	Earnings
                            		 $.01   	 Shares	    Capital   	(Deficit)

Balance at January 1, 1995    	$        	1,000     	$1,102	    $(1,832)

Net income	                                                     			243
Balance at December 31, 1995	           	1,000      	1,102     	(1,589)

Net income	                                                      		112
Balance at December 31, 1996           		1,000      	1,102     	(1,477)

Net income                                                     				  1 
Balance at December 31, 1997	  $     	   1,000     	$1,102	    $(1,476) 


See notes to consolidated financial statements.

JSCE, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

Year Ended December 31,                          	1997   	1996	   1995

Cash flows from operating activities
	Net income	                                    	$   1  	$ 112  	$ 243
	Adjustments to reconcile net income to net  	
	cash provided by operating activities	
		Extraordinary loss from early 	
			extinguishment of debt                                  		8      	7
		Depreciation, depletion and amortization	        127    	125    	122
		Amortization of deferred debt issuance costs	     11     	13     	14
		Deferred income taxes	                            13     	34    	113
		Non-cash employee benefit expense (income)	        4     	17     	(7)
		Change in current assets and liabilities, 	
			net of effects from acquisitions 	
			  Receivables                                  	(24)    	60    	(22)
			  Inventories                                  	(32)    	17     	(4)
			  Prepaid expenses and other current assets      	3            		(1)
			  Accounts payable and accrued liabilities	      (4)	          	(61)
			  Interest payable	                              (5)	    (4)    	(7)
			  Income taxes	                                  (6)     	2     	(1)
		Other, net	    	                                          (4)  	  (3)
	Net cash provided by operating activities	         88	    380   	 393
					
Cash flows from investing activities	
	Property additions                              	(166)  	(120)  	(130)
	Timberland additions	                             (16)   	 (9)	    (6)
	Investments in affiliates and acquisitions        	(9)          		(34)
	Construction funds held in escrow	                  9    	(10)
	Proceeds from property and timberland	
		disposals and sale of businesses	                  7   	   6	     10
	Net cash used for investing activities          	(175)  	(133)  	(160)
					
Cash flows from financing activities	
	Borrowings under bank credit facilities		                 250	
	Net borrowings (repayments) under accounts 	
		receivable securitization program	                30    	(38)	
	Payments of long-term debt	                        (7)  	(481)  	(284)
	Other increases in long-term debt	                 64     	13     	20
	Deferred debt issuance costs	    	                         (6)	    (4)
	Net cash provided by (used for)
   financing activities	                            87	   (262)  	(268)
					
Decrease in cash and cash equivalents	                    	(15)   	(35)
Cash and cash equivalents	
	Beginning of year	                                 12	     27   	  62
	End of year	                                   	$  12  	$  12  	$  27

See notes to consolidated financial statements.

JSCE, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions)


1.  Basis of Presentation

JSCE, Inc., hereafter referred to as the "Company," is a wholly-
owned subsidiary of Jefferson Smurfit Corporation ("JSC").  JSC 
has no operations other than its investment in JSCE, Inc.  The 
Company owns 100% of the equity interest in JSC (U.S.) and is the 
guarantor of the senior unsecured indebtedness of JSC (U.S.).  
The Company has no operations other than its investment in JSC 
(U.S.).  JSC (U.S.) has extensive operations throughout the 
United States. 

The deficit in stockholder's equity is primarily due to JSC's 
1989 purchase of JSC (U.S.)'s common equity owned by Jefferson 
Smurfit Group plc ("JS Group") and the acquisition by JSC (U.S.) 
of its common equity owned by the Morgan Stanley Leveraged Equity 
Fund I, L.P., which were accounted for as purchases of treasury 
stock.  

2.  Significant Accounting Policies

Nature of Operations:  The Company's major operations are in 
paper products, recycled and renewable fiber resources, newsprint 
production, and consumer and specialty packaging. The Company's 
paperboard mills procure virgin and recycled fiber and produce 
paperboard for conversion into corrugated containers, folding 
cartons and industrial packaging at Company-owned facilities and 
third-party converting operations.  Paper product customers 
represent a diverse range of industries including paperboard and 
paperboard packaging, wholesale trade, retailing and agri-
business.  The Company's newsprint operations produce newsprint 
from virgin and recycled fiber primarily for the newspaper 
industry.  Recycling operations collect or broker wastepaper for 
sale to Company-owned and third-party paper mills. Consumer 
packaging produces labels and flexible packaging for use in 
industrial, medical and consumer product applications.  Customers 
and operations are principally located in the United States.  
Credit is extended to customers based on an evaluation of their 
financial condition.  

Principles of Consolidation:  The consolidated financial 
statements include the accounts of the Company and its majority-
owned subsidiaries. Significant intercompany accounts and 
transactions are eliminated in consolidation.

Cash Equivalents:  The Company considers all highly liquid 
investments with an original maturity of three months or less to 
be cash equivalents.  Cash and cash equivalents of $9 million and 
$8 million are pledged at December 31, 1997 and 1996 as 
collateral for obligations associated with the accounts 
receivable securitization program (see Note 4).

Revenue Recognition:  Revenue is recognized at the time products 
are shipped.

2.  Significant Accounting Policies (cont)

Inventories:  Inventories are valued at the lower of cost or 
market, principally under the last-in, first-out ("LIFO") method 
except for $51 million in 1997 and $53 million in 1996 which are 
valued at the lower of average cost or market.  First-in, first-
out costs (which approximate replacement costs) exceed the LIFO 
value by $62 million and $59 million at December 31, 1997 and 
1996, respectively.

Property, Plant and Equipment:  Property, plant and equipment are 
carried at cost.  Provisions for depreciation and amortization 
are made using straight-line rates over the estimated useful 
lives of the related assets and the terms of the applicable 
leases for leasehold improvements.  Estimated useful lives of 
paper machines average 23 years, while major converting equipment 
and folding carton presses have estimated useful lives of 20 
years.

In the first quarter of 1996, the Company adopted Statement of 
Financial Accounting Standards ("SFAS") No. 121, "Accounting for 
the Impairment of Long-Lived Assets and for Long-Lived Assets to 
Be Disposed Of," which requires impairment losses to be recorded 
on long-lived assets used in operations when indicators of 
impairment are present and the undiscounted cash flows estimated 
to be generated by those assets are less than the assets' 
carrying amount.  SFAS No. 121 also addresses the accounting for 
long-lived assets that are expected to be disposed of.  The 
effect of adoption was immaterial to the Company's consolidated 
financial statements.

Timberland:  The portion of the costs of timberland attributed to 
standing timber is charged against income as timber is cut, at 
rates determined annually, based on the relationship of 
unamortized timber costs to the estimated volume of recoverable 
timber.  The costs of seedlings and reforestation of timberland 
are capitalized.

Deferred Debt Issuance Costs:  Deferred debt issuance costs 
included in other assets are amortized over the terms of the 
respective debt obligations using the interest method.

Goodwill:  The excess of cost over the fair value assigned to the 
net assets acquired is recorded as goodwill and is being 
amortized using the straight-line method over 40 years.

Income Taxes:  The Company accounts for income taxes under the 
provisions of SFAS No. 109, "Accounting for Income Taxes," which 
provides for an asset and liability approach for accounting for 
income taxes.  Under this approach, deferred assets and 
liabilities are recognized based upon anticipated future tax 
consequences attributable to differences between financial 
statement carrying amounts of assets and liabilities and their 
respective tax bases (see Note 5).

2.  Significant Accounting Policies (cont)

Interest Rate Swap and Cap Agreements: The Company periodically 
enters into interest rate swap and cap agreements to reduce the 
impact of interest rate fluctuations.  Swap agreements involve 
the exchange of fixed and floating rate interest payments without 
the exchange of the underlying principal amount.  Cap agreements 
provide that the Company will receive a certain amount when 
short-term interest rates exceed a threshold rate.  Periodic 
amounts to be paid or received under interest rate swap and cap 
agreements are accrued and recognized as adjustments to interest 
expense.  Premiums paid on cap agreements are included in 
interest payable and amortized to interest expense over the life 
of the agreements.  Gains and losses realized upon settlement of 
these agreements are deferred and amortized to interest expense 
over a period relevant to the agreement if the underlying hedged 
instrument remains outstanding, or immediately if the underlying 
hedged instrument is settled.  

At December 31, 1997, the Company had no interest rate swaps or 
cap agreements outstanding.

Environmental Matters:  The Company expenses environmental 
expenditures related to existing conditions resulting from past 
or current operations and from which no current or future benefit 
is discernible.  Expenditures which extend the life of the 
related property or mitigate or prevent future environmental 
contamination are capitalized.  The Company records a liability 
at the time when it is probable and can be reasonably estimated.  
Such liabilities are not discounted or reduced for potential 
recoveries from insurance carriers.

During 1996, the Company elected to early adopt the provisions of 
the American Institute of Certified Public Accountants Statement 
of Position ("SOP") 96-1, "Environmental Remediation 
Liabilities," which provides authoritative guidance on the 
recognition, measurement and disclosures of environmental 
remediation liabilities.  The effect of adopting the provisions 
of SOP 96-1 was immaterial to the Company's financial statements.

Use of Estimates:  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.

Prospective Accounting Pronouncements:  In 1997, the Financial 
Accounting Standards Board issued SFAS No. 131, "Disclosures 
about Segments of an Enterprise and Related Information."  SFAS 
No. 131 specifies the computation, presentation, and disclosure 
requirements for business segment information.  This statement is 
required to be adopted in 1998.  The Company is currently 
evaluating SFAS 131 and has not yet determined its impact on the 
Company's consolidated financial statements.

2.  Significant Accounting Policies (cont)

Reclassifications:  Prior to 1997, timberdeeds were included with 
timberland on the Consolidated Balance Sheets, and as depletion 
and timberland additions on the Consolidated Statements of Cash 
Flows.  Effective December 31, 1997, the Company has reclassified 
timberdeed activity as cash flows from operating activities.  The 
effect of the reclassification on the Consolidated Statements of 
Cash Flows was to reduce depletion by $17 million, $14 million 
and $17 million in 1997, 1996 and 1995, respectively, with 
offsetting effects to timberland additions and other current 
assets.  There was no effect on the Consolidated Statements of 
Operations.

Certain other reclassifications of prior year presentations have 
been made to conform to the 1997 presentation.

3.  Property, Plant and Equipment

Property, plant and equipment at December 31 consists of:

                                             				 1997  		 1996 
Land	                                         		$   63 		$   61
Buildings and leasehold improvements	              304    		280
Machinery, fixtures and equipment               	2,024	  	1,908
			                                             	2,391  		2,249
Less accumulated depreciation and amortization	    934	  	  849
			                                             	1,457	  	1,400
Construction in progress	                           66	  	   66

	     Net property, plant and equipment	        $1,523	 	$1,466

4.  Long-Term Debt

Long-term debt at December 31 consists of:
                                                 				 1997 		 1996 
Tranche A term loan	                                $  312		$  312
Tranche B term loan	                                   283   		283
Tranche C term loan                                   	141   		141
Revolving loans	                                       120    		55
Accounts receivable securitization program loans	      210	   	179
1994 series A senior notes	                            300	   	300
1994 series B senior notes	                            100		   100
1993 senior notes	                                     500   		500
Other			                                                74	 	   74
				                                                 2,040	 	1,944
Less current portion	                                   15		    10
			                                                	$2,025		$1,934

Aggregate annual maturities of long-term debt at December 31, 
1997 for the next five years are $15 million in 1998, $101 
million in 1999, $170 million in 2000, $347 million in 2001 and 
$568 million in 2002.

4.  Long-Term Debt (cont)

	1994 Credit Agreement
In 1994, JSC (U.S.) entered into a bank credit facility (the 
"1994 Credit Agreement") consisting of a $450 million revolving 
credit facility (the "Revolving Credit Facility") of which up to 
$150 million may consist of letters of credit, a Tranche A Term 
Loan and a Tranche B Term Loan.   During 1996, the 1994 Credit 
Agreement was amended to allow an additional $100 million 
borrowing under the Tranche B Term Loan and $150 million 
borrowing under a newly created Tranche C Term Loan.  The $250 
million in new proceeds from these term loans was used to reduce 
scheduled installment payments of the Tranche A Term Loan.  The 
Tranche A Term Loan matures in various installments through 2001.  
The Tranche B and Tranche C Term Loans mature in various 
installments through 2002. The Revolving Credit Facility matures 
in 2001.

Outstanding loans under the Tranche A Term Loan and the Revolving 
Credit Facility bear interest at rates selected at the option of 
JSC (U.S.) equal to the alternate base rate ("ABR") plus 1.50% 
per annum or the adjusted LIBOR Rate plus 2.50% per annum (8.66% 
at December 31, 1997).  Interest on outstanding loans under the 
Tranche B Term Loan is payable at a rate per annum selected at 
the option of JSC (U.S.), equal to the prime rate plus 2% per 
annum or the adjusted LIBOR Rate plus 3% per annum (9.0% at 
December 31, 1997).  Interest on the Tranche C Term Loan is 
payable at a rate per annum selected at the option of JSC(U.S.), 
equal to the prime rate plus 2.25% per annum or the adjusted 
LIBOR Rate plus 3.25% per annum (9.25% at December 31, 1997).  
ABR is defined as the highest of Chase Manhattan Bank's prime 
lending rate, 1/2 of 1% in excess of the Federal Funds Rate or 1% 
in excess of the base certificate of deposit rate.  The Tranche 
A, B and C Term Loans and the Revolving Credit Facility may be 
prepaid at any time, in whole or in part, at the option of JSC 
(U.S.).

A commitment fee of .50% per annum is assessed on the unused 
portion of the Revolving Credit Facility.  At December 31, 1997, 
the unused portion of this facility, after giving consideration 
to outstanding letters of credit, was $270 million.

The obligations under the 1994 Credit Agreement are 
unconditionally guaranteed 
by JSC, the Company and its subsidiaries and are secured by a 
security interest in substantially all of the assets of JSC 
(U.S.) and its material subsidiaries, with the exception of cash, 
cash equivalents and trade receivables.  The 1994 Credit 
Agreement is also secured by a pledge of all the capital stock of 
each material subsidiary of JSC and by certain intercompany 
notes.

The 1994 Credit Agreement contains various business and financial 
covenants including, among other things, (i) limitations on 
dividends, redemptions and repurchases of capital stock, (ii) 
limitations on the incurrence of indebtedness, liens, leases and 
sale-leaseback transactions, (iii) limitations on capital 
expenditures, (iv) maintenance of minimum levels of consolidated 
earnings before depreciation, interest, taxes and amortization 
and (v) maintenance of minimum interest coverage ratios.  The 
1994 Credit Agreement also requires prepayments if JSC (U.S.) has 
excess cash flows, as defined, or receives proceeds from certain 
asset sales, insurance, issuance of equity securities or 
incurrence of certain indebtedness.

4.  Long-Term Debt (cont)

 Accounts Receivable Securitization Program Loans
JSC (U.S.) has a $315 million accounts receivable securitization 
program (the "Securitization Program") which provides for the 
sale of certain of the Company's trade receivables to a wholly-
owned, bankruptcy remote, limited purpose subsidiary, Jefferson 
Smurfit Finance Corporation ("JS Finance").  JS Finance finances 
its purchases of eligible JSC (U.S.) receivables through the 
issuance of commercial paper or the proceeds of borrowings under 
a revolving liquidity facility and a term loan.  In 1995, JS 
Finance borrowed $15 million under the term loan and may issue up 
to $300 million trade receivables-backed commercial paper or 
borrow up to $300 million under a revolving liquidity facility.

Under the Securitization Program, JS Finance has granted a 
security interest in all its assets, principally cash and cash 
equivalents of $9 million and trade accounts receivable of $231 
million at December 31, 1997.  Interest rates on borrowings under 
the Securitization Program are at a variable rate (5.96% at 
December 31, 1997).  At December 31, 1997, $103 million was 
available for additional borrowing, subject to JSC (U.S.)'s level 
of eligible accounts receivable.  Borrowings under the 
Securitization Program, which expires February 2002, have been 
classified as long-term debt because of the Company's intent to 
refinance this debt on a long-term basis and the availability of 
such financing under the terms of the program.

	1994 Senior Notes
In 1994, JSC (U.S.) issued and sold $300 million  aggregate 
principal amount of unsecured 11.25% Series A Senior Notes due 
2004 and $100 million aggregate principal amount of unsecured 
10.75% Series B Senior Notes due 2002.  The Series A Senior Notes 
are redeemable in whole or in part at the option of JSC (U.S.), 
at any time on or after May 1, 1999 with premiums of 5.625% and 
2.813% of the principal amount if redeemed during the 12-month 
periods commencing May 1, 1999 and 2000, respectively.  The 
Series B Senior Notes are not redeemable prior to maturity.

The 1994 Senior Notes, which are unconditionally guaranteed on a 
senior basis by JSCE, Inc., rank pari passu with the 1994 Credit 
Agreement and the 1993 Senior Notes.  The 1994 Senior Notes 
agreement contains business and financial covenants which are 
less restrictive than those contained in the 1994 Credit 
Agreement.

Holders of the 1994 Senior Notes have the right, subject to 
certain limitations, to require JSC (U.S.) to repurchase their 
securities at 101% of the principal amount plus accrued and 
unpaid interest, upon the occurrence of a change of control or in 
certain events, from proceeds of major asset sales, as defined.

4.  Long-Term Debt (cont)

	1993 Senior Notes
In 1993, JSC (U.S.) issued $500 million of unsecured 9.75% Senior 
Notes (the "1993 Senior Notes") due 2003 which are not redeemable 
prior to maturity.  The 1993 Senior Notes, which are 
unconditionally guaranteed on a senior basis by JSCE, Inc., rank 
pari passu with the 1994 Credit Agreement and the 1994 Senior 
Notes.  The 1993 Senior Notes agreement contains business and 
financial covenants which are substantially less restrictive than 
those contained in the 1994 Credit Agreement and substantially 
similar to those contained in the 1994 Senior Notes agreement.

Holders of the 1993 Senior Notes have the right, subject to 
certain limitations, to require JSC (U.S.) to repurchase their 
securities at 101% of the principal amount plus accrued and 
unpaid interest, upon the occurrence of a change in control or in 
certain events, from proceeds of major asset sales, as defined.

	Other Debt
Other long-term debt at December 31, 1997 is payable in varying 
installments through the year 2029.  Interest rates on these 
obligations averaged approximately 8.31% at December 31, 1997.

	Other
Interest costs capitalized on construction projects in 1997, 1996 
and 1995 totaled $5 million, $3 million and $4 million, 
respectively.  Interest payments on all debt instruments for 
1997, 1996 and 1995 were $188 million, $186 million and $228 
million, respectively.

5.  Income Taxes

Significant components of the Company's deferred tax assets and 
liabilities at December 31 are as follows:

                                             						1997  	1996	
Deferred tax liabilities
	Property, plant and equipment and timberland	    	$414	  $396
	Inventory		                                        	13    	13
	Prepaid pension costs	                             	31    	31
	Other			                                          	114   	104
		Total deferred tax liabilities		                  572   	544

Deferred tax assets
	Employee benefit plans	                            	96	   102
	Net operating loss, alternative minimum tax and 
		tax credit carryforwards		                         99    	90
	Other				                                           58   	 53
		Total deferred tax assets                       		253   	245
	Valuation allowance for deferred tax assets      		(11)  	(18)
		Net deferred tax assets	                         	242   	227
		Net deferred tax liabilities		                   $330	  $317

5.  Income Taxes (cont)

Provision for income taxes before extraordinary item was as 
follows:

                                					       Year Ended December 31,  
                                       					 1997	   1996  	 1995
Current
	Federal                                   		$ (3)  $  41  	$  38
  State and local		   	                                 2   	   4
				                                          	(3)    	43     	42
Deferred
	Federal                                    	 	10     	(1)   	(12)
	State and local	                              	4     	(5)     	2
	Net operating loss carryforwards		   	                40   	 124
				                                         	 14	     34	    114
				                                        	$ 11  	$  77  	$ 156

At December 31, 1997, the Company has net operating loss 
carryforwards for state income tax purposes with a tax value of 
approximately $45 million which expire in years 1998 through 
2012.

The federal income tax returns for 1989 through 1994 are 
currently under examination.  While the ultimate results of such 
examination cannot be predicted with certainty, the Company's 
management believes that the examination will not have a material 
adverse effect on its consolidated financial condition or results 
of operations.

A reconciliation of the difference between the statutory federal 
income tax rate and the effective income tax rate as a percentage 
of income before income taxes and extraordinary item is as 
follows:
			                                          			
                           					       Year Ended December 31, 
                                   				 1997   	 1996  	  1995 

U.S. federal statutory rate            	35.0%	   35.0%   	35.0%
State and local taxes, net 	
	of federal tax benefit	                (2.8)   	(1.5)    	3.9  
Permanent differences from applying 
	purchase accounting	                  116.1     	4.1     	3.2  
Effect of valuation allowances on 
	deferred tax assets, net of 
	federal benefit                      	(58.0)    	2.1    	(3.4) 
Other, net	                              1.4  	      	      
		                                    		91.7%   	39.7%	   38.7% 

The Company made income tax payments of $8 million, $39 million 
and $41 million in 1997, 1996 and 1995, respectively.  


6.  Employee Benefit Plans

	Pension Plans
The Company sponsors noncontributory defined benefit pension 
plans covering substantially all employees not covered by multi-
employer plans.  Plans that cover salaried and management 
employees provide pension benefits that are based on the 
employee's five highest consecutive calendar years' compensation 
during the last ten years of service.  Plans covering non-
salaried employees generally provide benefits of stated amounts 
for each year of service.  These plans provide reduced benefits 
for early retirement.  The Company's funding policy is to make 
minimum annual contributions required by applicable regulations.  
The Company also participates in several multi-employer pension 
plans, which provide defined benefits to certain union employees.

Assumptions used in the accounting for the defined benefit plans 
were:

                                         		  		1997  	1996	  1995 
Weighted average discount rate	                7.25% 	7.75% 	7.25%
Rate of increase in compensation levels	        4.0%  	4.5%  	4.0%
Expected long-term rate of return on assets	    9.5%  	9.5%  	9.5%

The components of net pension expense (income) for the defined 
benefit plans and the total contributions charged to pension 
expense for the multi-employer plans follow:

                                           		   		Year Ended December 31, 
					                                             1997     	1996    	1995
Defined benefit plans
	Service cost-benefits earned during the period 	$  16	    $  16   	$  13
	Interest cost on projected benefit obligations	    63       	60      	59
	Actual return on plan assets	                    (140)    	(131)   	(155)
	Net amortization and deferral	                     61       	62      	75
Multi-employer plans	                                2	        2	       2
Net pension expense (income)                    	$   2    	$   9   	$  (6)

The following table sets forth the funded status and amounts 
recognized in the consolidated balance sheets at December 31 for 
the Company's defined benefit pension plans:

                                                   				1997   	1996
Actuarial present value of benefit obligations	
	Vested benefit obligations	                         $  821   	$759

	Accumulated benefit obligations	                    $  873   	$802

Projected benefit obligations                       	$  919   	$838
Plan assets at fair value	                            1,013    	926
Plan assets in excess of 
	projected benefit obligations                          	94     	88
Unrecognized net (gain) loss	                            (2)     	8
Unrecognized net asset at December 31,
	being recognized over 14 to 15 years	                  (13)   	(17)
Net pension asset                                   	$   79   	$ 79

6.  Employee Benefit Plans (cont)

Approximately 31% of plan assets at December 31, 1997 are 
invested in cash equivalents or debt securities and 69% are 
invested in equity securities.  Equity securities at December 31, 
1997 include 754,500 shares of JSC common stock with a market 
value of approximately $11 million and 26,526,260 shares of JS 
Group common stock having a market value of approximately $75 
million.  Dividends paid on JS Group common stock during 1997 
were approximately $1.7 million.

	Savings Plans
The Company sponsors voluntary savings plans covering 
substantially all salaried and certain hourly employees.  The 
Company match, which is paid in JSC common stock, was 60% in 1997 
and 1996 and 50% in 1995 of each participant's contributions up 
to an annual maximum.  The Company's expense for the savings 
plans totaled $9 million, $8 million and $6 million in 1997, 1996 
and 1995, respectively.

	Postretirement Health Care and Life Insurance Benefits
The Company provides certain health care and life insurance 
benefits for all salaried and certain hourly employees.  The 
Company has various plans under which the cost may be borne 
either by the Company, the employee or partially by each party.  
The Company does not currently fund these plans.  These benefits 
are discretionary and are not a commitment to long-term benefit 
payments.  The plans allow employees who retire on or after 
January 1, 1994 to become eligible for these benefits only if 
they retire after age 60 while working for the Company.

The following table sets forth the accumulated postretirement 
benefit obligation ("APBO") with respect to these benefits as of 
December 31:

                                                   				1997   	1996
Retirees                                              	$ 60	   $ 63
Active employees	                                        43	     35
Total accumulated postretirement benefit obligation	    103     	98
Unrecognized net (gain) loss 	                           (1)   	  3
Accrued postretirement benefit cost	                   $102   	$101

Net periodic postretirement benefit cost included the following 
components:

                                              				1997   	1996	   1995
Service cost-benefits earned during the period	    $ 2	    $ 1	    $ 1
Interest cost on accumulated postretirement
	benefit obligation	                                 7	      7      	7
Net amortization	                                   (1)    	(1)    	(1)
Net periodic postretirement benefit cost	          $ 8    	$ 7    	$ 7

6.  Employee Benefit Plans (cont)

A weighted-average discount rate of 7.25% and 7.75% was used in 
determining the APBO at December 31, 1997 and 1996, respectively. 
The weighted-average annual assumed rate of increase in the per 
capita cost of covered benefits ("health care cost trend rate") 
was 7.5%, with an annual decline of 1% until the rate reaches 
4.25% in the year 2001.  The effect of a 1% increase in the 
assumed health care cost trend rate would increase the APBO as of 
December 31, 1997 by $2 million and have no effect on the annual 
net periodic postretirement benefit cost for 1997.

	Supplemental Income Plan

The Company maintains an unfunded, non-qualified supplemental 
income pension plan (the "SIP") for certain key executives.  
Benefits are determined by final average earnings and years of 
credited service and are offset by a certain portion of social 
security benefits.

At December 31, 1997 and 1996, the projected benefit obligation 
was $31 million and $26 million, respectively, and the net 
unrecognized SIP cost was $11 million and $9 million.  The 
amounts included in other long-term liabilities in the 
Consolidated Balance Sheets were $20 million and $17 million as 
of December 31, 1997 and 1996, respectively.  During 1997, 1996 
and 1995 the Company incurred SIP expenses of $2 million, $9 
million, and $3 million, respectively.

7.  Related Party Transactions

	Transactions with JS Group
Transactions with JS Group, its subsidiaries and affiliated 
companies were as follows:

                                                  Year Ended December 31,
                                               				1997   	1996   	1995
Product sales                                     	$ 34   	$ 34  	 $ 44
Product and raw material purchases                  	51     	64    	108
Management services income	                           4      	5      	4
Charges from JS Group for services provided	          1             		1
Charges to JS Group for costs pertaining to
	the Fernandina No. 2 paperboard machine	            53     	54     	57
Receivables at December 31                           	3      	3      	3
Payables at December 31                             	11     	10     	13

Product sales to and purchases from JS Group, its subsidiaries 
and affiliates are consummated on terms generally similar to 
those prevailing with unrelated parties.

The Company provides certain subsidiaries and affiliates of JS 
Group with general management and elective management services 
under separate Management Services Agreements.  In consideration 
for general management services, the Company is paid a fee up to 
2% of the subsidiaries' or affiliates' gross sales.  In 
consideration for elective services, the Company is reimbursed 
for its direct cost of providing such services.

7.  Related Party Transactions (cont)

An affiliate of JS Group owns the No. 2 paperboard machine that 
is located in the Company's Fernandina Beach, Florida, paperboard 
mill (the "Fernandina Mill").  Pursuant to an operating agreement 
between the Company and the affiliate, the Company operates and 
manages the No. 2 paperboard machine and is compensated for its 
direct production and manufacturing costs and indirect 
manufacturing, selling and administrative costs incurred by the 
Company for the entire Fernandina Mill.  The compensation is 
determined by applying various formulas and agreed-upon amounts 
to the subject costs.  The amounts reimbursed to the Company are 
reflected as reductions of cost of goods sold and selling and 
administrative expenses in the accompanying consolidated 
statements of operations.

Transactions with Times Mirror
In July 1995, under the terms of a shareholder agreement, JSC 
(U.S.) acquired the remaining 20% minority interest of Smurfit 
Newsprint Corporation ("SNC") from The Times Mirror Company 
("Times Mirror").  SNC supplies newsprint to Times Mirror at 
amounts which approximate prevailing market prices under the 
terms of a long-term agreement.  The obligations of the Company 
and Times Mirror to supply and purchase newsprint are wholly or 
partially terminable upon the occurrence of certain defined 
events.  Sales to Times Mirror for 1997, 1996 and 1995 were $140 
million, $165 million and $189 million, respectively.

8.  Leases

The Company leases certain facilities and equipment for 
production, selling and administrative purposes under operating 
leases.  Future minimum lease payments at December 31, 1997 
required under operating leases that have initial or remaining 
noncancelable lease terms in excess of one year are $36 million 
in 1998, $29 million in 1999, $23 million in 2000, $19 million in 
2001, $17 million in 2002 and $73 million thereafter.

Net rental expense was $50 million, $50 million and $48 million 
for 1997, 1996 and 1995, respectively.

9.  Fair Value of Financial Instruments

The estimated fair values of the Company's financial instruments 
are as follows:

                           	   			             December 31,           
                                 					    1997             1996       
                                				Carrying	 Fair  	Carrying	  Fair  
                                				 Amount 	 Value 	 Amount 	  Value 
Assets
	Cash and cash equivalents	          $   12	$   12	   $   12	 $   12

Liabilities
	Long-term debt, including 
	  current maturities                	2,040 	2,105    	1,944  	2,005

9.  Fair Value of Financial Instruments (cont)

The carrying amount of cash equivalents approximates fair value 
because of the short maturity of those instruments.  The fair 
value of the Company's long-term debt is estimated based on the 
quoted market prices for the same or similar issues or on the 
current rates offered to the Company for debt of the same 
remaining maturities.

10.  Contingencies

The Company's past and present operations include activities 
which are subject to federal, state and local environmental 
requirements, particularly relating to air and water quality.  
The Company faces potential environmental liability as a result 
of violations of permit terms and similar authorizations that 
have occurred from time to time at its facilities.  

The Company faces potential liability for response costs at 
various sites with respect to which the Company has received 
notice that it may be a potentially responsible party ("PRP") as 
well as contamination of certain Company-owned properties, under 
the Comprehensive Environmental Response, Compensation and 
Liability Act ("CERCLA") concerning hazardous substance 
contamination.  In estimating its reserves for environmental 
remediation and future costs, the Company's estimated liability 
reflects only the Company's expected share.  In determining the 
liability, the estimate takes into consideration the number of 
other PRPs at each site, the identity and financial condition of 
such parties and experience regarding similar matters.

The Company is a defendant in a number of lawsuits and claims 
arising out of the conduct of its business, including those 
related to environmental matters. While the ultimate results of 
such suits or other proceedings against the Company cannot be 
predicted with certainty, the management of the Company believes 
that the resolution of these matters will not have a material 
adverse effect on its consolidated financial condition or results 
of operations.

In the fourth quarter of 1995, SNC recorded a pretax charge 
totaling $25 million to implement a program of corrective action 
to address product quality matters and failure to follow proper 
manufacturing and internal procedures relating to production of 
exterior siding, a non-core product line of SNC.  As of December 
31, 1997 this program was substantially complete and the Company 
believes the remaining reserve is adequate to address 
expenditures contemplated under the corrective action program.  

JSC and SNC have been served with complaints alleging that 
Cladwood exterior siding, produced by SNC and used in 
prefabricated or manufactured homes, deteriorates under normal 
conditions and exposure.  The suits purport to be class actions 
on behalf of persons who own or have purchased or used Cladwood, 
a non-core product line of SNC.  The complaints allege either 
negligence, unfair trade practices or breach of warranty, and 
seek unspecified amounts of damages and in one case declaratory 
and injunctive relief.  Management is unable to predict at this 
time the final outcome of these suits or whether the resolution 
of the matters could materially affect the Company's results of 
operations, cash flows or financial position.  The Company and 
SNC intend to defend the actions vigorously.

11.  Business Segment Information

The Company's principal lines of business are 
paperboard/packaging products and newsprint.  The 
paperboard/packaging products segment includes the manufacture 
and distribution of containerboard, boxboard and solid bleached 
sulfate, corrugated containers, folding cartons, fiber 
partitions, papertubes and cores, labels and flexible packaging.  
The newsprint segment includes the manufacture and distribution 
of newsprint.  A summary by business segment of net sales, income 
from operations, identifiable assets, capital expenditures and 
depreciation, depletion and amortization follows:
                                              Year Ended December 31,
                                               1997    1996    1995
Net Sales
  Paperboard/packaging products              $2,936  $3,087  $3,706 
  Newsprint                                     302     323     387
                                             $3,238  $3,410  $4,093  

Income from operations
  Paperboard/packaging products              $  177  $  335  $  604
  Newsprint                                      27      56      26
  Total incoem from operations                  204     391     630
Interest expense, net                          (190)   (194)   (234) 
Other, net                                       (2)     (3)      7
Income before income taxes and 
  extraordinary item                        	$   12 	$  194 	$  403

Identifiable assets
	Paperboard/packaging products              	$2,287 	$2,189 	$2,246
	Newsprint	                                     290    	284    	296
	Corporate assets 	                             194	    215  	  241
		                                         		$2,771 	$2,688 	$2,783

Capital expenditures
	Paperboard/packaging products              	$  166 	$  112 	$  119
	Newsprint                    	                  16  	   17	    17
			                                         	$  182 	$  129 	$  136

Depreciation, depletion and amortization
	Paperboard/packaging products              	$  113 	$  112 	$  105
 Newsprint                                				   14  	   13	     17	
                                         				$  127	 $  125	 $  122

Sales and transfers between segments are not material.  Export 
sales are less than 10% of total sales.  Corporate assets consist 
principally of cash and cash equivalents, deferred income taxes, 
deferred debt issuance costs and other assets which are not 
specific to a segment.  

12. Summarized Financial Information JSC (U.S.)

The following summarized financial information is presented for 
JSC (U.S.), a wholly-owned subsidiary of JSCE, Inc.  No separate 
financial statements are presented for JSC (U.S.) because the 
financial statements of JSC (U.S.) are identical to those of 
JSCE, Inc.  JSC (U.S.) is the borrower under the 1994 Credit 
Agreement and the issuer of the 1994 Senior Notes and the 1993 
Senior Notes.  These securities are guaranteed by JSCE, Inc.

Condensed Consolidated Balance Sheets

                                					         	    December 31,   
                                          						  1997    	1996

Current assets	                              		$   602	 $   559
Property, plant and equipment
 and timberlands, net	                          	1,788   	1,720
Goodwill		                                        	237     	246
Other assets			                                    144  	   163
	Total assets		                               	$ 2,771 	$ 2,688

Current liabilities	                         		$   531 	$   525
Long-term debt		                                	2,025   	1,934
Other liabilities                               			589     	604
Stockholder's deficit		 
	Common stock			
	Additional paid-in capital		                   	1,102   	1,102
	Retained earnings (deficit)			                 (1,476) 	(1,477)
		Total stockholder's deficit			                  (374)	   (375)
	Total liabilities and stockholder's deficit			$ 2,771 	$ 2,688


Condensed Consolidated Statements of Operations

                                        					 Year Ended December 31,  
				                                           1997 	  1996  	 1995 
Net sales                                   	$3,238 	$3,410 	$4,093
Cost and expenses	                            3,034	  3,019  	3,463
Interest expense, net	                          190	    194    	234
Other income (expense), net	                     (2)	    (3)	     7
Income before income taxes and
  extraordinary item 	                           12    	194    	403
Provision for income taxes	                      11     	77    	156
Extraordinary item
	Loss from early extinguishment of 
	  debt, net of income tax benefits 	                	   (5)	    (4)

Net income                                  	$    1 	$  112 	$  243

13.  Quarterly Results (Unaudited)

The following is a summary of the unaudited quarterly results of 
operations:
 
	                                   			First  	Second  	Third   	Fourth 
                                  				Quarter 	Quarter 	Quarter 	Quarter
		
1997
	Net sales                             	$778  	  $785  	  $832    	$843  
	Gross profit                           	103     	109     	129     	121  
	Income from operations                 	 39     	 44  	    65      	56  
	Net income (loss)                        (7)     	(4) 	     8    	   4  
 
1996
	Net sales                             	$916    	$844    	$834     	$816  
	Gross profit                       	    205     	155     	151      	145  
	Income from operations                 	138      	92      	86      	 75  
	Income before extraordinary item        	53     	 27      	22       	15  
	Loss from early extinguishment
    of debt		                                      (4)              		(1)
	Net income                              	53      	23      	22       	14  

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

None

PART III

ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

The following table sets forth the names and ages of the 
directors of the Company.

				      Name	                Age
				Leigh J. Abramson	          29
				Alan E. Goldberg	           43
				Richard W. Graham	          63
				Michael C. Hoffman	         35
				G. Thompson Hutton	         42
				Michael M. Janson	          50
				Howard E. Kilroy	           62
				Thomas A. Reynolds, III	    45
				Michael W.J. Smurfit	       61
				James E. Terrill	           64

The Board of Directors currently consists of ten directors.  The 
directors are classified into three groups: three directors 
having terms expiring in 1998, including Messrs. Abramson, Graham 
and Hutton; three directors having terms expiring in 1999, 
including Messrs. Goldberg, Kilroy and Reynolds; and four 
directors having terms expiring in 2000, including Messrs. 
Hoffman, Janson, Smurfit and Terrill.

Executive Officers

The following table sets forth the names, ages and positions of 
the executive officers of the Company.

       Name                Age                  Position
Robert P. Breimeier		       54    	Vice President - Transportation and 
                             						Logistics
Janet R. Carl	            		37    	Vice President - Environmental 	
                             						Affairs
James P. Davis           			42    	Vice President and General Manager 	
                             						- Consumer Packaging Division
James D. Duncan			          56    	Vice President and General Manager  
                               				-	Industrial Packaging Division
Richard J. Golden         		55	    Vice President - Purchasing
Richard W. Graham         		63    	President and Chief Executive 		
                             						Officer and Director
Michael F. Harrington      	57    	Vice President - Human Resources
Charles A. Hinrichs       		44    	Vice President and Treasurer
Jay D. Lamb	              		50    	Vice President and General Manager 	
                             						- SNC
F. Scott Macfarlane		       52	    Vice President and General Manager 	
						                             - Folding 	Carton and Boxboard Mill 	
                             						Division
Timothy McKenna	          		49     Vice President - Investor Relations 
                            		     and Communications
Patrick J. Moore          		43     Vice President and Chief Financial 	
                         					     Officer
Thomas A. Pagano	          	51     Vice President - Planning
Michael W.J. Smurfit		      61     Chairman of the Board and Director
David C. Stevens          		63     Vice President and General Manager 	
                         					     - Smurfit Recycling Company
John E. Straw            			55     Vice President - Corporate Sales 	
                         					     and Marketing
Michael E. Tierney		        49     Vice President, General Counsel and 
                         					     Secretary
William N. Wandmacher	      55     Vice President and General Manager 	
					                              - Containerboard Mill Division
Gary L. West		             	55     Vice President and General Manager 	
					                              - Container Division

Biographies

Leigh J. Abramson was named to the Board of Directors of the 
Company in January 1997.  Mr. Abramson joined Morgan Stanley & 
Co. Incorporated ("MS&Co.") in 1990 and is a Vice President in 
MS&Co.'s Merchant Banking Division.  He is a Vice President of 
Morgan Stanley Capital Partners III, Inc. ("MSCP III, Inc.") and 
Morgan Stanley Leveraged Equity Fund II, Inc. ("MSLEF II, Inc."), 
which is the general partner of The Morgan Stanley Leveraged 
Equity Fund, L.P. ("MSLEF II").  Mr. Abramson also serves as 
Director of PageMart Wireless, Inc. and Silgan Holdings Inc.

Robert P. Breimeier was appointed Vice President - Transportation 
and Logistics in December 1996.  He was Director of Operations - 
Transportation and Logistics from September 1995 to December 1996 
and Director of Corporate Planning from December 1994 to 
September 1995.  Prior to that, he held various managerial 
positions since joining the Company in 1966, including Vice 
President and General Manager of Coated Recycled Boxboard Mills 
from April 1989 until reassignment to Corporate Planning.

Janet R. Carl was named Vice President - Environmental Affairs in 
August 1996.  She joined the Company in August 1995 as 
environmental counsel.  Previously, she was employed as an 
environmental attorney with Mayor, Day, Caldwell and Keeton in 
Houston, Texas.

James P. Davis has been Vice President and General Manager -
Consumer Packaging Division since November 1995.  He served as 
Division Director of Operations from August 1995 to November 
1995.  Prior to that, he held various management positions in the 
Container Division since joining the Company in 1977.

James D. Duncan was appointed Vice President and General Manager 
- Industrial Packaging Division in October 1996.  He was Vice 
President and General Manager, Converting Operations - Industrial 
Packaging Division from April 1994 to October 1996 and served as 
General Manager, Converting Operations - Industrial Packaging 
Division from February 1993 to April 1994.  Prior to that, he was 
President and Chief Executive Officer of Sequoia Pacific Systems, 
an affiliate of the Company, that he joined in August 1989.

Alan E. Goldberg has been a Director of the Company since 1989.  
He is head of MS&Co.'s Private Equity Group and has been a 
Managing Director of MS&Co. since 1988.  Mr. Goldberg is a 
Managing Director of MSLEF II, Inc. and  MSCP III, Inc.  Mr. 
Goldberg also serves as Director of CIMIC Holdings Limited, CAT 
Limited, Catalytica, Inc., Hamilton Services Limited, Amerin 
Corporation and Amerin Guaranty Corporation, Direct Response 
Corporation and several private companies.

Richard J. Golden has been Vice President - Purchasing since 
1985.  In January 1994, he was assigned responsibility for world-
wide purchasing for JS Group.

Richard W. Graham has been a Director of the Company since 
January 1997.  He has been President and Chief Executive Officer 
of the Company since January 1997 and was President of the 
Company from July 1996 to December 1996.  He served as Senior 
Vice President from February 1994 to July 1996.  Prior to that, 
he held various positions in the Folding Carton and Boxboard Mill 
Division, including Vice President and General Manager from 
February 1991 to January 1994.  Mr. Graham also serves as 
Director of Mercantile Bank of St. Louis N.A.

Michael F. Harrington has been Vice President - Human Resources 
since January 1992.  Prior to joining the Company, he was 
Corporate Director of Labor Relations/Safety and Health with 
Boise Cascade Corporation for more than 5 years.

Charles A. Hinrichs has been Vice President and Treasurer since 
April 1995.  Prior to joining the Company, he was employed by The 
Boatmen's National Bank of St. Louis for 13 years, where most 
recently he was Senior Vice President and Chief Credit Officer.

Michael C. Hoffman was named to the Board of Directors of the 
Company in February 1998.  Mr. Hoffman joined MS&Co. in 1986 and 
is a Principal of MS&Co., MSLEF II, Inc. and MSCP III, Inc.  Mr. 
Hoffman has been a member of the MS Private Equity Group since 
1989 and is a member of MS&Co.'s bank steering committee.

G. Thompson Hutton has been a Director of the Company since 1994.  
Mr. Hutton has been President and Chief Executive Officer of Risk 
Management Solutions, Inc., an information services company based 
in Menlo Park, California, since 1991.  Prior to that, he was a 
management consultant with McKinsey & Company, Inc. from 1986 to 
1991.  He also serves as a Trustee of Colorado Outward Bound 
School.

Michael M. Janson was named to the Board of Directors of the 
Company in October 1997.  Mr. Janson joined MS&Co. in 1987 and is 
a Managing Director of MS&Co. and MSCP III.  Before joining 
MS&Co.'s Merchant Banking Division in 1997, he was a Managing 
Director of MS&Co.'s High Yield Capital Markets Department.  Mr. 
Janson also serves as Director of American Color Graphics, Inc.

Howard E. Kilroy has been a Director of the Company since 1989.  
Mr. Kilroy was Chief Operations Director of JS Group from 1978 
until March 1995 and President of JS Group from October 1986 
until March 1995.  He was a member of the Supervisory Board of 
Smurfit International B.V. ("SIBV") from January 1978 to January 
1992.  He was Senior Vice President of the Company for over 5 
years.  He retired from his executive positions with JS Group and 
the Company at the end of March 1995, but remains a Director of 
JS Group and the Company.  In addition, he is Governor (Chairman) 
of Bank of Ireland and a Director of CRH plc.

Jay D. Lamb was appointed Vice President and General Manager of 
SNC in May 1996.  He was Director of Operations of SNC from May 
1995 to May 1996.  Prior to that, he held various accounting and 
managerial positions with SNC since joining the Company in 1970.

F. Scott Macfarlane has been Vice President and General Manager -
Folding Carton and Boxboard Mill Division since November 1995.  
He served as Vice President and General Manager of the Folding 
Carton Division from December 1993 to November 1995.  Prior to 
that, he held various managerial positions within the Folding 
Carton Division since joining the Company in 1971.

Timothy McKenna was named Vice President - Investor Relations and 
Communications in July 1997.  He joined the Company in October 
1995 as Director of Investor Relations and Communications.  Prior 
to joining the Company, he was employed by Union Camp Corporation 
for 14 years where most recently he was Director of Investor 
Relations.

Patrick J. Moore was named Vice President and Chief Financial 
Officer of the Company in October 1996.  He was Vice President 
and General Manager - Industrial Packaging Division from December 
1994 to October 1996.  He served as Vice President and Treasurer 
from February 1993 to December 1994 and was Treasurer from 
October 1990 to February 1993.  He joined the Company in 1987 as 
Assistant Treasurer.

Thomas A. Pagano was named Vice President - Planning in May 1996.  
He was Director of Corporate Planning from September 1995 to May 
1996.  Prior to that, Mr. Pagano held various managerial 
positions within the Company's Container Division, including Area 
Regional General Manager from January 1994 to September 1995.

Thomas A. Reynolds, III was named to the Board of Directors of 
the Company in August 1997.  He has been a Partner since 1984 
with Winston & Strawn, a law firm that regularly represents the 
Company on numerous matters.  Mr. Reynolds is an adjunct faculty 
member in trial advocacy at Northwestern University School of 
Law.  He also serves as Director of Georgetown University.

Michael W.J. Smurfit has been Chairman and Chief Executive 
Officer of JS Group since 1977.  Dr. Smurfit has been Chairman of 
the Board of the Company since 1989.  He was Chief Executive 
Officer of the Company prior to July 1990.

David C. Stevens has been Vice President and General Manager -
Smurfit Recycling Company since January 1993.  Prior to that, he 
was General Sales Manager for the Reclamation Division, since 
joining the Company in 1987.

John E. Straw has been Vice President - Corporate Sales and 
Marketing since May 1996.  Mr. Straw has held various managerial 
positions in the Folding Carton and Boxboard Mill Division since 
joining the Company in 1969, including General Manager, National 
Account Sales from May 1995 to May 1996.

James E. Terrill has been Vice Chairman of the Board of the 
Company since February 1997 and a Director of the Company since 
1994.  He was Chief Executive Officer from July 1996 to December 
1996 and President and Chief Executive Officer from February 1994 
to July 1996.  He served as Executive Vice President - Operations 
from August 1990 to February 1994.  Mr. Terrill also served as 
President of SNC from February 1986 to February 1993.

Michael E. Tierney has been Vice President, General Counsel and 
Secretary since January 1993.  Prior to that he served as Senior 
Counsel and Assistant Secretary since joining the Company in 
1987.

William N. Wandmacher has been Vice President and General Manager 
- Containerboard Mill Division since January 1993.  He served as 
Division Vice President - Medium Mills from October 1986 to 
January 1993.  Prior to that, he held various positions in 
production, plant management and planning since joining the 
Company in 1966.

Gary L. West was named Vice President and General Manager -
Container Division in October 1996.  He was Vice President of 
Operations for Container Division from May 1996 to October 1996.  
Mr. West was Vice President - Sales and Marketing from December 
1994 to May 1996.  Prior to that, he held various management 
positions in the Container, Consumer Packaging and Industrial 
Packaging Divisions since joining the Company in 1980, including 
Vice President and General Manager - Industrial Packaging 
Division from October 1992 to December 1994.

ITEM 11.	EXECUTIVE COMPENSATION

The information required in response to this item is set forth 
under the captions "Executive Compensation", "Report of the 
Compensation Committee on Executive Compensation" and 
"Appointment Committee Interlocks and Insider Participation" in 
JSC's proxy statement in connection with the Annual Meeting of 
Stockholders to be held on May 7, 1998, which will be filed with 
the Securities and Exchange Commission on or before March 31, 
1998 (the "JSC Proxy Statement"), and is incorporated herein by 
reference.

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
MANAGEMENT

All of the outstanding JSC(U.S.) Common Stock is owned by JSCE, 
and all of the JSCE Common Stock is owned by JSC.

Additional information required in response to this item is set 
forth under the caption "Principal Stockholders" in the JSC Proxy 
Statement and is incorporated herein by reference.

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required in response to this item is set forth 
under the caption "Certain Transactions" in the JSC Proxy 
Statement and is incorporated herein by reference.

PART IV

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

(a) 	(1) and (2) The list of Financial Statements and 
Financial Statement 	Schedules required by this item is included in Item 8.
(3)  Exhibits.
	
 3.1		  Certificate of Incorporation of the Company 
        (incorporated by reference to Exhibit 3.1 to JSCE's 
        Annual Report on Form 10-K for the fiscal year ended 
        December 31, 1994).
 3.2	  	By-laws of the Company (incorporated by reference 
        to Exhibit 3.2 to JSCE's Annual Report on Form 10-K for 
        the fiscal year ended December 31, 1994).
        4.1		ndenture for the Series A 1994 Senior Notes 
        (incorporated by reference to Exhibit 4.1 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended March 
        31, 1994).
 4.2		  Indenture for the Series B 1994 Senior Notes 
        (incorporated by reference to Exhibit 4.2 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended March 
        31, 1994).
 4.3		  Indenture for the 1993 Senior Notes (incorporated 
        by reference to Exhibit 4.4 to JSC's Registraiton 
        Statement on Form S-1 (File No. 33-75520)).
 4.4		  First Supplemental Indenture to the 1993 Senior 
        Note Indenture (incorporated by reference to Exhibit 4.5 
        to JSC's Registration Statement on Form S-1 (File No. 33-
        75520)).
10.1	   Second Amended and Restated Organization Agreement, as of 
        August 26, 1992, among SIBV, MSLEF II, SIBV/MS Holdings, 
        Inc., JSC, Container Corporation of America ("CCA") and 
        MSLEF II, Inc. (incorporated by reference to Exhibit 
        10.1(d) to JSC (U.S.)'s Quarterly Report on Form 10-Q for 
        the quarter ended September 30, 1992).
10.2(a)	Stockholders Agreement among JSC, SIBV, MSLEF II and 
        certain related entities (incorporated by reference to 
        Exhibit 10.2 to JSC's Quarterly Report on Form 10-Q for 
        the quarter ended March 31, 1994).
10.2(b)	First Amendment to Stockholders Agreement, dated as of 
        January 13, 1997, by and among SIBV, MSLEF II, JSC and 
        certain related entities  (incorporated by reference to 
        Exhibit 10.2(b) to JSC's Annual Report on Form 10-K for 
        the fiscal year ended December 31, 1996).
10.3	   Registration Rights Agreement among JSC, MSLEF II and 
        SIBV (incorporated by reference to Exhibit 10.3 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended March 
        31, 1994).
10.4	   Subscription Agreement among JSC, JSC (U.S.), CCA and 
        SIBV (incorporated by reference to Exhibit 10.4 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended March 
        31, 1994).
10.5(a)	Restated Newsprint Agreement, dated January 1, 1990, by 
        and between SNC and Times Mirror (incorporated by 
        reference to Exhibit 10.39 to JSC (U.S.)'s Annual Report 
        on Form 10-K for the fiscal year ended December 31, 
        1990).  Portions of this exhibit have been excluded 
        pursuant to Rule 24b-2 of the Securities Exchange Act of 
        1934, as amended.
10.5(b)	Amendment No. 1 to the Restated Newsprint Agreement 
        (incorporated by reference to Exhibit 10.6(b) to JSC's 
        Registration Statement on Form S-1 (File No. 33-75520)).
        10.6	Operating Agreement, dated as of April 30, 1992, by and 
        between CCA and Smurfit Paperboard, Inc. (incorporated by 
        reference to Exhibit 10.42 to JSC (U.S.)'s Quarterly 
        Report on Form 10-Q for the quarter ended March 31, 
        1992).
10.7	   JSC (U.S.) Deferred Compensation Plan as amended 
        (incorporated by reference to Exhibit 10.7 to JSC's 
        Annual Report on Form 10-K for the fiscal year ended 
        December 31, 1996).
10.8	   JSC (U.S.) Management Incentive Plan (incorporated by 
        reference to Exhibit 10.10 to JSC's Annual Report on Form 
        10-K for the fiscal year ended December 31, 1995).
10.9 	  Rights Agreement, dated as of April 30, 1992, among CCA, 
        Smurfit Paperboard, Inc. and Bankers Trust Company, as 
        collateral trustee (incorporated by reference to Exhibit 
        10.43 to JSC (U.S.)'s Quarterly Report on Form 10-Q for 
        the quarter ended March 31, 1992).
10.10	  Jefferson Smurfit Corporation Amended and Restated 1992 
        Stock Option Plan dated as of May 1, 1997 (incorporated 
        by reference to Exhibit 10.10 to JSC's Annual Report on 
        Form 10-K for the fiscal year ended December 31, 1997).
10.11(a)Credit Agreement, amended and restated as of May 17, 
        1996, among JSC, JSCE, JSC (U.S.) and the banks parties 
        thereto (incorporated by reference to Exhibit 10.1 to 
        JSC's Quarterly Report on Form 10-Q for the quarter ended 
        June 30, 1996).
10.11(b)Amendment Agreement dated as of May 17, 1996 among JSC, 
        JSCE, JSC (U.S.), SNC and the banks parties thereto 
        (incorporated by reference to Exhibit 10.2 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended June 
        30, 1996).
10.11(c)Amendment No. 2, dated as of June 15, 1997, to the 
        Amended and Restated Credit Agreement among JSC, JSC 
        (U.S.), JSCE, Inc. and the financial institutions party 
        thereto (incorporated by reference to Exhibit 10.1 to 
        JSC's Quarterly Report on Form 10-Q for the quarter ended 
        June 30, 1997).
10.12(a)Term Loan Agreement dated as of February 23, 1995 among 
        JSC Finance and Bank Brussels Lambert, New York Branch 
        (incorporated by reference to Exhibit 10.1 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended March 
        31, 1995).
10.12(b)Depositary and Issuing and Paying Agent Agreement (Series 
        A Commercial Paper) as of February 23, 1995 (incorporated 
        by reference to Exhibit 10.2 to JSC's Quarterly Report on 
        Form 10-Q for the quarter ended March 31, 1995).
10.12(c)Depositary and Issuing and Paying Agent Agreement (Series 
        B Commercial Paper) as of February 23, 1995 (incorporated 
        by reference to Exhibit 10.3 to JSC's Quarterly Report on 
        Form 10-Q for the quarter ended March 31, 1995).
10.12(d)Receivables Purchase and Sale Agreement dated as of 
        February 23, 1995 among JSC (U.S.), as the Initial 
        Servicer and JS Finance, as the Purchaser (incorporated 
        by reference to Exhibit 10.4 to JSC's Quarterly Report on 
        Form 10-Q for the quarter ended March 31, 1995).
10.12(e)Liquidity Agreement dated as of February 23, 1995 among 
        JS Finance, the Financial Institutions parties hereto as 
        Banks, Bankers Trust Company, as Facility Agent and 
        Bankers Trust Company as Collateral Agent (incorporated 
        by reference to Exhibit 10.6 to JSC's Quarterly Report on 
        Form 10-Q for the quarter ended March 31, 1995).
10.12(f)Commercial Paper Dealer Agreement dated as of February 
        23, 1995 among BT Securities Corporation, MS&Co., JSC 
        (U.S.) and JS Finance (incorporated by reference to 
        Exhibit 10.7 to JSC's Quarterly Report on Form 10-Q for 
        the quarter ended March 31, 1995).
10.12(g)Addendum dated March 6, 1995 to Commercial Paper Dealer 
        Agreement (incorporated by reference to Exhibit 10.8 to 
        JSC's Quarterly Report on Form 10-Q for the quarter ended 
        March 31, 1995).
10.12(h)First Omnibus Amendment dated as of March 31, 1996 among 
        JSC (U.S.), JSFC and the banks parties thereto 
        (incorporated by reference to Exhibit 10.3 to JSC's 
        Quarterly Report on Form 10-Q for the quarter ended June 
        30, 1996).
10.12(i)Affiliate Receivables Sale Agreement dated as of March 
        31, 1996 between SNC and JSC (incorporated by reference 
        to Exhibit 10.4 to JSC's Quarterly Report on Form 10-Q 
        for the quarter ended June 30, 1996).
10.12(j)Amendment No. 2 dated as of August 19, 1997 to the Term 
        Loan Agreement among JS Finance and Bank Brussels 
        Lambert, New York Branch and JSC (U.S.) as Servicer 
        (incorporated by reference to Exhibit 10.12(j) to JSC's 
        Annual Report on Form 10-K for the fiscal year ended 
        December 31, 1997).
10.12(k)Amendment No. 2 dated as of August 19, 1997 to the 
        Receivables Purchase and Sale Agreement among JSC (U.S.) 
        as the Seller and Servicer and JS Finance as the 
        Purchaser, Bankers Trust Company as Facility Agent and 
        Bank Brussels Lambert, New York Branch as the Term Bank 
        (incorporated by reference to Exhibit 10.12(k) to JSC's 
        Annual Report on Form 10-K for the fiscal year ended 
        December 31, 1997).
10.12(l)Amendment No. 2 dated as of August 19, 1997 to the 
        Liquidity Agreement among JS Finance, Bankers Trust 
        Company as Facility Agent, JSC (U.S.) as Servicer, Bank 
        Brussels Lambert, New York Branch as Term Bank and the 
        Financial Institutions parties thereto as Banks 
        (incorporated by reference to Exhibit 10.12(l) to JSC's 
        Annual Report on Form 10-K for the fiscal year ended 
        December 31, 1997).
10.13	  Consulting Agreement dated as of October 24, 1996 by and 
        between James E. Terrill and JSC (U.S.)(incorporated by 
        reference to Exhibit 10.15 to JSC's Annual Report on Form 
        10-K for the fiscal year ended December 31, 1996).
18.1   	Letter regarding change to accounting for pension plans 
        (incorporated by reference to Exhibit 18.1 to JSC 
        (U.S.)'s Quarterly Report on Form 10-Q for the quarter 
        ended September 30, 1993).
21.1	   Subsidiaries of the Company.
24.1	   Powers of Attorney (incorporated by reference to Exhibit 
        24.1 to JSC's Annual Report on Form 10-K for the fiscal 
        year ended December 31, 1997).
27.1	   Financial Data Schedule.

(b)	Report on Form 8-K.
	The Company did not file any reports on Form 8-K during 
 the three months ended December 31, 1997.

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.


DATE  March 2, 1998                            JSCE, Inc.
		                                            (Registrant)
  
		                          					BY    /s/ Patrick J. Moore         
	                                          Patrick J. Moore
                               							     Vice-President and Chief 
                                           Financial Officer
		
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 in the capacities and on the date indicated.
		
   SIGNATURE		                          	TITLE	                  DATE


                            *   	Chairman of the Board 
   Michael W. J. Smurfit		      	and Director

                            *  	 President and Chief Executive Officer 
   Richard W. Graham		          	and Director (Principal Executive 	
                          							Officer)

/s/ Patrick J. Moore           	 Vice-President and Chief       March 2,1998
    Patrick J. Moore		          	Financial Officer (Principal 
                                	Accounting Officer)

                            *  		Director
    Leigh J. Abramson

                            *  		Director
    Alan E. Goldberg

                            *  		Director
    Michael C. Hoffman

                            *  		Director
    G. Thompson Hutton	                                  

                            *  		Director
    Michael M. Janson

                            * 	 	Director
    Howard E. Kilroy 

                            *   	Director
    Thomas A. Reynolds, III

                            *  		Director
    James E. Terrill


* By /s/ Patrick J. Moore       , pursuant to Powers of Attorney   
	        Patrick J. Moore		       filed as a part of the Form 	             
        	As Attorney in Fact		    10-K.


	JSCE, Inc.
	SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
	(In Millions)
<TABLE>
<CAPTION>



       Column A                             	  Column B           Column C               Column D       Column E
                                             Balance at
                                             Beginning of                  Charged
                                             Period, as     Charged to     to Other     Deductions     Balance
                                            Previously      Costs and      Accounts     Describe       at End
      Description                            Reported       Expenses       Describe       <fn1>       of Period 
 

   <S>                                        <C>              <C>               <C>         <C>          <C>
   Year ended December 31, 1997
  	Allowance for doubtful accounts	           $  9	            $  2	             $   	       $  1	        $ 10

   Year ended December 31, 1996
  	Allowance for doubtful accounts           	$  9	            $  5	             $   	       $  5	        $  9

   Year ended December 31, 1995
  	Allowance for doubtful accounts	           $  9	            $  1 	            $   	       $  1	        $  9

<FN>
<fn1>  Uncollectible amounts written off, net of recoveries.
</FN>

</TABLE>