Exhibit 12(b)
                               XEROX CORPORATION
                  COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                 (In Millions)

                       Six months ended             Year ended
                            June 30,                December 31,
                         1999    1998    1998*   1997    1996    1995    1994
Fixed charges:
  Interest expense     $  405  $  334  $  748  $  617  $  592  $  603  $  520
  Rental expense           61      69     145     140     140     142     170
Total fixed charges
  before capitalized
  interest and preferred
  stock dividends of
  subsidiaries            466     403     893     757     732     745     690
Preferred stock dividends
  of subsidiaries          27      27      55      50       -       -       -
Capitalized interest        2       -       -       -       -       -       2
   Total fixed charges $  495  $  430  $  948  $  807  $  732  $  745  $  692

Earnings available for
  fixed charges:
  Earnings**           $1,161  $ (628)  $  837  $2,268  $2,067  $1,980  $1,602
  Less undistributed
    income in minority
    owned companies       (33)    (21)     (27)    (84)    (84)    (90)    (54)
  Add fixed charges before
    capitalized interest
    and preferred stock
    dividends of
    subsidiaries          466     403      893     757     732     745     690
  Total earnings
    available for
    fixed charges      $1,594  $ (246)  $1,703  $2,941  $2,715  $2,635  $2,238

Ratio of earnings to
   fixed charges (1)(2)  3.22      *      1.80    3.64    3.71    3.54    3.23

(1) The ratio of earnings to fixed charges has been computed based on the
    Company's continuing operations by dividing total earnings available for
    fixed charges, excluding capitalized interest and preferred stock
    dividends of subsidiaries, by total fixed charges.  Fixed charges consist
    of interest, including capitalized interest and preferred stock dividends
    of subsidiaries, and one-third of rent expense as representative of the
    interest portion of rentals.  Debt has been assigned to discontinued
    operations based on historical levels assigned to the businesses when
    they were continuing operations, adjusted for subsequent paydowns.
    Discontinued operations consist of the Company's Insurance, Other
    Financial Services, and Third Party Financing and Real Estate businesses.

(2) The Company's ratio of earnings to fixed charges includes the effect of
    the Company's finance subsidiaries, which primarily finance Xerox
    equipment.  Financing businesses are more highly leveraged and,
    therefore, tend to operate at lower earnings to fixed charges ratio
    levels than do non-financial businesses.

*   Earnings for the six months of 1998 were inadequate to cover fixed
charges.  The coverage deficiency was $676 million.  Excluding the effects
of the charges recorded in connection with the 1998 restructuring plan,
the ratio of earnings to fixed charges would have been 3.25 and 3.55 for
the six months ended June 30, 1998 and the year ended December 31, 1998,
respectively.
**  Sum of "Income before Income Taxes, Equity Income and Minorities'
    Interests" and "Equity in Net Income of Unconsolidated Affiliates."
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