SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q


            [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

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


For the Quarterly Period Ended                 Commission File Number
    September 30, 1998                              333-58731



                    General American Railcar Corporation II


Incorporated in the                           IRS Employer Identification
 State of Delaware                                    36-4247116

                             500 West Monroe Street
                             Chicago, IL 60661-3676
                                 (312) 621-6451


         The registrant meets the conditions set forth in General Instruction 
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with a
reduced disclosure format.

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such 
filing requirements for the past 90days.    Yes         No [X] 

         Registrant had 1,000 shares of common stock outstanding (all owned by
General American Transportation Corporation) as of October 31, 1998.

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                         PART I - FINANCIAL INFORMATION


                     GENERAL AMERICAN RAILCAR CORPORATION II

                               STATEMENT OF INCOME
                                   (UNAUDITED)

                PERIOD FROM JULY 8, 1998 (DATE OF INCORPORATION)
                              TO SEPTEMBER 30, 1998
                                  In Thousands



         <S>                                                                                 <C>  
 
         Gross income......................................................                  $ 140

         Costs and expenses
             Operating lease expense.......................................                     83
             Other operating costs.........................................                     11
                                                                                       --------------
                                                                                                94
                                                                                       --------------

         Income before income taxes........................................                     46

         Income taxes......................................................                     21

                                                                                       ==============
         Net income                                                                         $   25
                                                                                       ==============





_________
<FN>

Note- The financial statements are unaudited but include all adjustments which 
management considers necessary for a fair statement of the results of operations
and financial position for the period.  Operating results for the period from 
July 8, 1998 (date of incorporation) to September 30, 1998 are not indicative of
the results that may be achieved for the period from July 8, 1998 (date of 
incorporation) to December 31, 1998.
</FN>
</TABLE>


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<TABLE>
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                     GENERAL AMERICAN RAILCAR CORPORATION II

                                  BALANCE SHEET
                                   (UNAUDITED)

                               SEPTEMBER 30, 1998
                                  In Thousands



         <S>                                                                                   <C>

         ASSETS

         Cash and cash equivalents...................................................          $2,000
         Due from General American Transportation Corporation (GATC) ................             129
                                                                                          -----------------

         TOTAL ASSETS................................................................           $2,129
                                                                                          =================


         LIABILITIES AND SHAREHOLDER'S EQUITY

         Trade accounts payable......................................................        $     83
         Income taxes payable........................................................              15
         Deferred taxes..............................................................               6
                                                                                          -----------------

              Total liabilities and deferred items...................................             104

         Shareholder's equity
             Common stock - par value $1 per share: authorized, issued and
             outstanding, 1,000 shares (owned by GATC)...............................               1
             Additional capital......................................................           1,999
             Reinvested earnings.....................................................              25
                                                                                          -----------------

              Total shareholder's equity.............................................           2,025
                                                                                          -----------------

         TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY..................................          $2,129
                                                                                          =================
</TABLE>
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                     GENERAL AMERICAN RAILCAR CORPORATION II

                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                PERIOD FROM JULY 8, 1998 (DATE OF INCORPORATION)
                              TO SEPTEMBER 30, 1998
                                  In Thousands


         <S>                                                                                      <C> 
         OPERATING ACTIVITIES
              Net income  ..........................................................              $   25
              Adjustments to reconcile net income to net cash
                  provided by operating activities:
                     Deferred income taxes                                                             6
                     Change in operating assets and liabilities.....................                 (31)
                                                                                            -----------------

             Net cash provided by operating activities..............................                       -


         INVESTING ACTIVITIES
              Purchases of equipment   .............................................            (208,402)
              Proceeds on disposal of equipment.....................................             208,402
                                                                                            -----------------

             Net cash provided by investing activities..............................                       -


         FINANCING ACTIVITIES
             Contributed capital from GATC .........................................               2,000
                                                                                            -----------------

             Net cash provided by financing activities..............................               2,000
                                                                                            -----------------

         NET INCREASE IN CASH AND CASH EQUIVALENTS                                           $     2,000
                                                                                            =================
</TABLE>
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                      MANAGEMENT'S DISCUSSION OF OPERATIONS


GENERAL

General American Railcar  Corporation II ("GARC II" or "the Company") is a newly
organized   wholly-owned   special  purpose   subsidiary  of  General   American
Transportation  Corporation  ("GATC")  which  was  formed on July 8,  1998.  The
Company filed an S-3  registration  statement  with the  Securities and Exchange
Commission  which  became  effective  on  September  28,  1998.  The  Company is
structured so that based on existing facts, circumstances, and assumptions, the 
Company is, in the opinion of counsel,  "bankruptcy  remote" in that,  if a GATC
bankruptcy proceeding were to occur, the assets and liabilities of GARC II would
not be consolidated with those of GATC for purposes of the proceeding.  However,
there could be no absolute  assurance  that in the event of insolvency the court
would not  consolidate  the assets,  in  particular if there were to be material
changes in the existing facts, circumstances and assumptions.

Commencing  operations in September  1998, GARC II was organized for the primary
purposes of entering into a sale and leaseback of 3,380 specialized railcars and
subleasing  those  railcars to customers  under full service  leases.  The fleet
composition is  approximately  75% tank cars and 25% covered hopper cars. A full
service lease  encompasses  maintaining  and  servicing the railcars  subject to
lease,  paying ad  valorem  property  taxes,  and  providing  several  ancillary
services.

The Company has entered  into a  management  agreement  with GATC,  whereby GATC
maintains  and  services  the  railcars,  for which  GARC II pays GATC a monthly
management  fee.  Additionally,  the  Company  was  initially  capitalized  by a
$2,000,000 equity contribution from GATC.

As part of the management agreement, the Company's transactions are processed on
GATC's  information  systems.  GATC believes that it has an effective program in
place to address what is commonly referred to as the Year 2000 issue in a timely
manner.  If GATC's plan is not completed on a timely basis,  the Year 2000 issue
could have a significant  impact on GATC and the Company.  Based on the progress
and results of the Year 2000 project thus far,  GATC believes that the Year 2000
issue should not pose significant operational problems.

Management's discussion includes statements which may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private  Securities
Litigation   Reform  Act  of  1995.  This  information  may  involve  risks  and
uncertainties  that could cause  actual  results to differ  materially  from the
forward-looking statements.  Although the company believes that the expectations
reflected  in  such   forward-looking   statements   are  based  on   reasonable
assumptions,  such statements are subject to risks and uncertainties  that could
cause actual results to differ materially from those projected.  These risks and
uncertainties  include,  but are not  limited to,  unanticipated  changes in the
markets served by GARC II, such as the petroleum and chemical industries.

RESULTS OF OPERATIONS

On September 29, 1998,  GARC II commenced  leasing its 3,380  railcars to its 82
customers,  whose businesses fall within the chemical,  petroleum,  agricultural
and mineral industries. Consistent with its expectations of leasing the railcars
at an average rate of $622 per month (roughly $21 per day), revenues for the two
days of operations in the period ending September 30, 1998 were $140,000.  After
operating  lease  expense,  management  fees,  and other  costs,  net income was
$25,000, or 18% of revenue.
<PAGE>


                           PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K
(a)       27       Financial Data Schedule for General 
                   American Transportation Corporation 
                   for the quarter ended September 30, 1998.
                   Submitted to the SEC along with the 
                   electronic submission of this 
                   Quarterly Report on Form 10-Q.

(b)                No reports on Form 8-K were filed
                   during the reporting period.



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                              SIGNATURES 


         Pursuant to the requirements 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.


                     GENERAL AMERICAN RAILCAR CORPORATION II
                                  (Registrant)



                                /s/D. Ward Fuller
    -------------------------------------------------------------------------
                                 D. Ward Fuller
                             President and Director
                            (Duly Authorized Officer)



                              /s/Donald J. Schaffer
    -------------------------------------------------------------------------
                               Donald J. Schaffer
                   Principal Financial and Accounting Officer





Date:  November 13, 1998

<PAGE>
EXHIBITS FILED WITH DOCUMENT

27   Financial Data Schedule for General 
     American Transportation Corporation 
     for the quarter ended September 30, 1998.
     Submitted to the SEC along with the 
     electronic submission of this 
     Quarterly Report on Form 10-Q.