[LOGO] MERCANTILE BANKSHARES CORPORATION

							September 12, 1997



Mr. Edward K. Dunn, Jr.
Two Hopkins Plaza
Baltimore, MD  21201


Dear Mr. Dunn:

      This letter will confirm our agreement, effective September 9, 1997 
(the "Effective Date") concerning changes in your employment relationship 
with Mercantile Bankshares Corporation ("Mercshares"), Mercantile-Safe 
Deposit and Trust Company ("Merc-Safe") and subsidiaries of Mercshares and 
Merc-Safe.

1.    As agreed, you have been elected Chairman of the Board of Mercantile 
Mortgage Corporation and you have resigned as President and a director 
of Mercshares, as President (and Chief Operating Officer) and a director of 
Merc-Safe, and from all positions with subsidiaries of Mercshares and 
Merc-Safe except Mercantile Mortgage Corporation.

2.    For the calendar year 1997, you will receive the balance of your 
current annual base compensation of $550,000 and such incentive 
compensation as would be awardable to you as a Class I participant for 
all of 1997 under the Annual Incentive Compensation Plan of Mercantile 
Bankshares Corporation and Affiliates ("AICP").  The incentive 
compensation will be payable, as is customary, in the first quarter of 
1998.  Commencing on January 1, 1998, you will receive an annual salary 
of $160,000, which will be your only salary, and you will cease 
participation in the AICP (except for your receipt of incentive 
compensation for 1997, as described above).  Amounts payable to you 
under this letter agreement will not be subject to reduction or offset 
by your outside income.

3.    Your employment with Mercantile Mortgage Corporation will be as the 
Chairman of its Board, and you also agree to provide cooperation with 
and support of Mercshares and its subsidiaries in relationships with 
customer accounts.  Mercantile Mortgage Corporation has the separate 
position of a President and Chief Executive Officer who reports 
directly to the President of Merc-Safe.  You will not be required to 
perform executive or line management duties.  You will be allowed time 
for attention to personal investments, participation in family 
businesses, outside directorships and charitable and public service 
activities, and other business activities (provided such other 
activities are not inconsistent with your employment responsibilities).  
Your employment will continue from the Effective Date until your normal 
retirement date on June 1, 2000, at which time you will retire from 
Mercantile Mortgage Corporation and from any positions then held with


Mr. Edward K. Dunn, Jr.
September 12, 1997
Page Two                        


      Mercshares or any subsidiary of Mercshares, and commence receiving 
retirement benefits under the Mercshares benefit plans by which you are 
covered.

4.    If, prior to your normal retirement date on June 1, 2000, any event or 
transaction occurs by which Mercantile Mortgage Corporation is no longer 
controlled by Mercshares (or by a subsidiary of Mercshares) or by which 
Mercantile Mortgage Corporation no longer exists, Mercshares will cause your 
employment under this letter agreement to be continued by another subsidiary 
of Mercshares.

5.    Until two years after the termination of your employment under this 
letter agreement, you agree not to engage in banking or investment 
management activities in the State of Maryland as an employee or 
director of, consultant to, or in any other comparable capacity with, 
any other banking institution or bank holding company or entity engaged 
in investment management, but this prohibition shall not apply to 
engaging in investment banking activities which do not involve your 
participation in commercial banking or investment management activities 
and which, during the term of your employment under this letter 
agreement, are not inconsistent with your employment responsibilities 
under paragraph 3 of this letter agreement.  You agree that this 
provision shall be enforceable by injunctive relief.

6.    Your Supplemental Pension Agreement with Mercshares and Merc-Safe of 
January 10, 1992 is amended to change your monthly benefit from $5,000 
to $6,750 (and to change all references therein to "$5,000" from 
"$5,000" to "$6,750") and to include Mercantile Mortgage Corporation 
(and any other subsidiary of Mercshares by which you may subsequently 
be employed) within the definition of the word "Company."

7.    Your Option Agreement with Mercshares of August 17, 1995 will remain in 
effect in accordance with its terms.  Your Executive Employment 
Agreement with Mercshares and Merc-Safe of December 13, 1988 and your 
Executive Severance Agreement with Mercshares and Merc-Safe of December 
31, 1989 are terminated as of the Effective Date.

8.    For each of the years 1998, 1999, and 2000, you will be entitled to 
have your charitable contributions matched under the Mercshares 
matching gift program at levels which would be permitted if your annual 
salary were $550,000 and also to designate up to $50,000 of the 
Mercshares direct annual giving to charities which are on the 
Mercshares approved list.



Mr. Edward K. Dunn, Jr.
September 12, 1997
Page Three              

9.    As an employee of Mercantile Mortgage Corporation you will be covered 
by all employee benefit plans for which employees of Mercshares 
affiliates are eligible generally with the additional provision that 
your life insurance coverage will be not less than $500,000.  You will also 
be entitled to expense reimbursement in accordance with the 
current practices available to you prior to the Effective Date.  
Further, you will be furnished with office space and a secretary (at 
your current secretary's salary) until the later of June 1, 2000 or the 
end of your term as Chairman of the Board of Directors of Johns Hopkins 
Medicine.  You will continue to be entitled to use of a company 
automobile in accordance with current policies and practices, title to 
which will be transferred to you upon your retirement.

10.   As an obligor under this letter agreement, Mercshares will be 
responsible for the performance of the obligations of any of its 
subsidiaries pursuant to this agreement.  In the event of a material 
breach of this letter agreement by Mercshares or any of its 
subsidiaries, your entitlement to damages shall not be subject to any 
obligation on your part to mitigate or offset damages by other 
employment earnings or other income, and any such other earnings or 
income shall not offset such damages.

11.   This letter agreement represents the entire agreement among the 
parties with respect to its subject matter, and any amendment to this 
letter agreement must be in writing and signed by each party.




		Mercantile Bankshares Corporation
	
	By:  /s/ H. Furlong Baldwin
	     _____________________________________
	     H. Furlong Baldwin, Chairman and CEO



		Mercantile-Safe Deposit and Trust Company

	By:  /s/ H. Furlong Baldwin
	     _____________________________________
	     H. Furlong Baldwin, Chairman and CEO
								      

Agreed:      /s/ Edward K. Dunn, Jr.
             _____________________________________   
	     Edward K. Dunn, Jr.