FORM 10-K
                         SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549
     (Mark One)
     [ X ]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                            SECURITIES EXCHANGE ACT OF 1934

                      For the fiscal year ended December 31, 1995
                                          OR
     [   ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                            SECURITIES EXCHANGE ACT OF 1934

                             Commission file number 1-11023
                                  E'TOWN CORPORATION
                   (Exact name of registrant as specified in its charter)

          New Jersey                                   22-2596330
   (State of incorporation)                (I.R.S. Employer Identification No.)
   600 South Avenue
   Westfield, New Jersey                                 07090
   (Address of principal executive offices)            (Zip Code)
    Registrant's telephone number, including area code:      (908) 654-1234

          Securities registered pursuant to Section 12(b) of the Act:

Title of each class                   Name of each exchange on which registered
Common Stock, without par value                 New York Stock Exchange

                           Commission file number 0-628
                            ELIZABETHTOWN WATER COMPANY
                (Exact name of registrant as specified in its charter)

      New Jersey                                       22-1683171
(State of incorporation)                   (I.R.S. Employer Identification No.)
600 South Avenue
Westfield, New Jersey                                    07090
(Address of principal executive offices)               (Zip Code)
 Registrant's telephone number, including area code:         (908) 654-1234

      Securities reSecurities registered pursuant to Section 12(b) of the Act:

Title of each class                   Name of each exchange on which registered
      None                                          None

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Secrities 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 contained herein, and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  __X__

On December 31, 1995, the aggregate market value of E'town Corporation's voting
stock held by non-affiliates was $226,636,460.




On December 31, 1995, there were 7,523,202 shares of Common Stock outstanding,
exclusive of treasury shares or shares held by subsidiaries of E'town
Corporation.

Note: All of the Common Stock of Elizabethtown Water Company is owned by E'town
Corporation.

Parts  II and IV incorporate information by reference from the Annual Report to
Shareholders of E'town Corporation for the Year Ended December 31, 1995.
Part III incorporates information by reference from the definitive Proxy
Statement in connection with E'town Corporation's Annual Meeting of Shareholders
to be held on May 16, 1996.










                               E'TOWN CORPORATION
                           ELIZABETHTOWN WATER COMPANY
                         1995 ANNUAL REPORT ON FORM 10-K

                               TABLE OF CONTENTS

PART I

ITEM                                                                     PAGE

____                                                                     ____


  1.  Business......................................................        1
         Organization...............................................        1
         Service Area and Customers.................................        1
         Water Supply...............................................        2
         Water Treatment Facilities and
          Water Quality Regulations.................................        3
         Transmission and Distribution..............................        6
         Energy Supply..............................................        6
         Environmental Matters......................................        7
         Franchises.................................................        8
         Employee Relations.........................................        8
         Rate Matters...............................................        8
         Real Estate Matters........................................        9
         Executive Officers of the Corporation and Elizabethtown....       11

  2.  Properties....................................................       12

  3.  Legal Proceedings.............................................       12

  4.  Submission of Matters to a Vote of
       Security Holders.............................................       12


PART II

ITEM

____


  5.  Market for the Corporation's Common Stock and
       Related Stockholder Matters..................................       12

  6.  Selected Financial Data.......................................       13

  7.  Management's Discussion and Analysis of
       Consolidated Financial Condition and
       Results of Operations.........................................      14

  8.  Financial Statements and Supplementary Data...................       23







  9.  Changes in and Disagreements with Accountants
       on Accounting and Financial Disclosure.......................       23









PART III

ITEM                                                                     PAGE

____                                                                     ____


 10.  Directors and Executive Officers of the Registrant............       23

 11.  Executive Compensation........................................       23

 12.  Security Ownership of Certain Beneficial
       Owners and Management........................................       23

 13.  Certain Relationships and Related
       Transactions.................................................       23


PART IV

ITEM

____


 14.  Exhibits, Financial Statement Schedules and
       Reports on Form 8-K..........................................       23

SIGNATURES...........................................................      26

APPENDIX I

      Elizabethtown Water Company and Subsidiary
      Consolidated Financial Statements for the Years
      Ended December 31, 1995, 1994 and 1993 and
      Independent Auditors' Report

<PAGE>
                         E'TOWN CORPORATION 

                    ELIZABETHTOWN WATER COMPANY 

                             Form 10-K 

                            Annual Report 

                For the year ended December 31, 1995 


                               PART I 

ITEM 1.   Business  

ORGANIZATION 

     E'town Corporation (E'town or Corporation) was incorporated under 
the laws of the State of New Jersey in 1985 to serve as a holding 
company for Elizabethtown Water Company (Elizabethtown or Company) and 
its wholly owned subsidiary, The Mount Holly Water Company (Mount 
Holly).  Elizabethtown and Mount Holly are regulated water utilities 
which, as a consolidated entity, are referred to herein as 
Elizabethtown Water Company (Elizabethtown Water Company).  E'town 
Properties, Inc. (Properties) was incorporated in 1987 as a wholly 
owned and non-regulated subsidiary of E'town to acquire, develop and 
sell real estate holdings. 

     Elizabethtown and Mount Holly are engaged in the distribution of 
water for domestic, commercial, industrial and fire protection 
purposes and for resale by other water companies and public bodies. 
     
     Elizabethtown is a New Jersey corporation, one of whose 
predecessors was first incorporated in 1854.  The present corporation 
was formed in 1961 as a result of a consolidation of Elizabethtown 
Water Company Consolidated and Plainfield-Union Water Company.  
Princeton and Somerville Water Companies were merged into 
Elizabethtown in 1973, and, as of January 1, 1977, Bound Brook Water 
Company was also merged into Elizabethtown.  Elizabethtown owns all of 
the common stock of Mount Holly which contributed approximately 3% of 
the Company's consolidated operating revenues for 1995.  

SERVICE AREA AND CUSTOMERS 
     
     At December 31, 1995 Elizabethtown and Mount Holly furnished 
water service on a retail basis to general customers and to industrial 
customers served through 195,375 meters in 54 municipalities in the 
counties of Union, Middlesex, Somerset, Mercer, Hunterdon, Ocean, 
Morris and Burlington in the central part of New Jersey.  
Elizabethtown also provides, on a wholesale basis, a portion of the 
water requirements of eight additional municipalities with their own 
retail water systems and of three other investor-owned water 
companies.  Water for fire protection service is provided to 53 
municipalities and also to commercial and industrial establishments.

                           -1-

     The Company's operating revenues by major classifications for the 
twelve months ending December 31, 1995 are as follows: 
     
           General customers                             62.2% 
           Sales to other systems                        17.3% 
           Larger industrial customers                    7.3% 
           Fire protection service/miscellaneous         13.2% 

     The systems are substantially all metered except for fire 
service. 

     Additional operating statistics appear on page 13. 

WATER SUPPLY 

     The water supply systems of Elizabethtown and Mount Holly are 
physically separate.  During 1995, Elizabethtown's pumpage averaged 
132.5 million gallons per day (MGD) and Mount Holly's pumpage averaged 
3.6 MGD.  Elizabethtown and Mount Holly believe they have sufficient 
water supply sources to meet the current needs of their customers.  
Mount Holly plans to construct additional facilities, as discussed 
below, to augment its water supplies. 

     In 1995, surface water sources supplied approximately 88% of 
Elizabethtown's supply with wells supplying the remaining 12%.  All of 
Mount Holly's water is produced from wells. 

     Substantially all of Elizabethtown's surface water is purchased 
under a long-term contract with the New Jersey Water Supply Authority 
(NJWSA) which requires Elizabethtown to purchase (i) 32 MGD from the 
state-owned Delaware and Raritan Canal which transports water from the 
Delaware River Basin plus (ii) 70 MGD from the Raritan River Basin 
which includes the state-owned Spruce Run-Round Valley Reservoir 
System.  The safe yield of the Raritan River Basin and the Delaware 
and Raritan Canal is 225 MGD of which 151 MGD is presently allocated 
to Elizabethtown and others.  The NJWSA has available and, as needed 
to meet system demand, Elizabethtown purchases, water over and above 
the Company's minimum purchase obligation. 

    The Company continues to analyze the potential effect of federal 
and state regulations on the long-term capacity of Elizabethtown's 
wells.  Since 1985, wells with an aggregate capacity of 11 MGD have 
been withdrawn from service due to more stringent federal and state 
regulations and increased groundwater contamination at certain well 
sites.  Under state and federal regulations now in effect, 
Elizabethtown owns and operates wells with an aggregate safe daily 
yield of approximately 18 MGD.  If regulations governing radionuclides 
in drinking water proposed by the United States Environmental 
Protection Agency (USEPA) are adopted, Elizabethtown's well capacity 
will decrease to about 13 MGD. 

                                     
     All of Mount Holly's system delivery of 3.6 MGD in 1995 was 
supplied from wells.  To ensure an adequate supply of quality water 

                          -2-

from an aquifer serving parts of southern New Jersey, state 
legislation will require Mount Holly, as well as other suppliers 
obtaining water from designated portions of this aquifer, to reduce 
pumpage from its wells.  Mount Holly has a plan to develop a new water 
supply, treatment and transmission system necessary to obtain water 
outside the designated portion of the aquifer and to treat the water 
and pump it into the Mount Holly system.  This is referred to as the 
Mansfield Project.  The project is currently estimated to cost $16.5 
million excluding an Allowance for Funds Used During Construction 
(AFUDC).  Construction is expected to begin after issuance of the 
final water allocation diversion permit and is expected to be 
completed in 1997.  The land for the supply and treatment facilities 
has been purchased and wells have been drilled and can produce the 
required supply.  Mount Holly has filed for rate relief relating to 
the Mansfield Project.

     On October 5, 1995, the New Jersey Department of Environmental 
Protection (NJDEP) granted Mount Holly a water allocation diversion 
permit for four wells that are to be the water supply for the 
Mansfield Project.  On October 20, 1995, New Jersey-American Water 
Company requested, and was subsequently granted, an adjudicatory 
hearing on the permit.  The Company and Mount Holly believe that the 
permit in question will be upheld but cannot predict the outcome of 
the objection.  In the event that the objection is successful and the 
permit is rescinded Mount Holly would utilize the alternative plan of 
purchasing water from New Jersey-American Water Company.

WATER TREATMENT FACILITIES AND WATER QUALITY REGULATIONS 

     Elizabethtown owns and operates a treatment plant at the 
confluence of the Raritan and Millstone Rivers adjacent to the 
Delaware and Raritan Canal to treat surface waters purchased from the 
NJWSA.  The plant can withdraw water from any of these sources, which 
is an advantage in the event that one source becomes contaminated.  
The plant was placed in service in 1931 and has continually been 
upgraded since that time.  Elizabethtown also operates smaller 
treatment facilities to treat groundwater produced by certain wells.  
Mount Holly operates similar groundwater treatment facilities. 

     Both the USEPA and the NJDEP regulate the operation of 
Elizabethtown's and Mount Holly's water treatment and distribution 
systems and the quality of the water Elizabethtown and Mount Holly 
deliver to their customers.  Currently, Elizabethtown and Mount Holly 
believe they are in compliance, in all material respects, with all 
present federal and state water quality standards, including all 
regulations promulgated to date by the USEPA pursuant to the Federal 
Safe Drinking Water Act, as amended (SDWA), and by the NJDEP pursuant 
to similar state legislation.  Elizabethtown has included certain 
capital projects in its three-year capital expenditure plans which it 
anticipates will be necessary to comply with regulations that have 
been proposed by the USEPA and NJDEP.  Recovery of the financing 

                            -3-

and operating costs of such improvements, plus those costs for any 
additional projects which cannot be foreseen at this time, will be 
requested in rates. 

     Elizabethtown has responded to recent water quality regulations 
promulgated by NJDEP and the USEPA by replacing groundwater supplies 
with increased withdrawals of surface water.  Accordingly, the 
proportion of supply produced from surface water has increased from 
85% in 1986 to 88% in 1995.  The Company expects this trend to 
continue because it is preferable from the standpoint of operational 
efficiency and cost to modify treatment processes and facilities at 
one or two large plants than to attempt to constantly upgrade 
treatment facilities at multiple well sites. 

New Surface Water Treatment Plant 

     Elizabethtown's capital program includes the construction of a 
new water treatment plant, the Canal Road Water Treatment Plant 
(Plant) to increase Elizabethtown's sustainable production capacity 
and provide the ability to continue to meet water quality regulations. 
In April 1994, the Company executed a lump-sum contract for the 
construction of the Plant,  which will have an initial capacity of 40 
MGD.  Construction of the Plant is currently in progress.  The current 
estimated cost of the Plant is approximately $100 million, excluding 
AFUDC.  The Company has expended $83.0 million, excluding AFUDC of 
$7.2 million, on the Plant as of December 31, 1995.  The project is 
proceeding on schedule, the construction contract remains on budget 
and the project is expected to be completed during the third quarter 
of 1996. 

     In August 1993, the New Jersey Board of Public Utilities (BPU) 
approved a stipulation (1993 Plant Stipulation) signed by all parties 
to the Company's petition filed in connection with the Plant which 
states that the parties affirm the Plant is necessary and that the 
Company's estimate regarding the Plant's cost, at that time of $87 
million, and construction period are reasonable.  In April 1994, 
Elizabethtown notified all parties to the 1993 Plant Stipulation that 
the estimated cost of the Plant had increased. The 1993 Plant 
Stipulation also provides for a potential rate setting mechanism for 
the Plant during the construction period that has never been required 
to be triggered.   

Water Quality Regulations 

     As required by the SDWA, the USEPA has established maximum 
contaminant levels (MCLs) for various substances found in drinking 
water.  As authorized by similar state legislation, the NJDEP has set 
MCLs for certain substances which are more restrictive than the MCLs           
set by the USEPA.  In certain cases, the USEPA and NJDEP have also 
mandated that certain treatment procedures be followed in addition to 
satisfying MCLs established for specific contaminants.  The NJDEP is 
also the USEPA's agent for enforcing the SDWA in New Jersey and, in 
that capacity, monitors the activities of Elizabethtown and Mount 
Holly and reviews the results of water quality tests performed by 
Elizabethtown and Mount Holly for adherence to applicable regulations.

                              -4-

     Regulations generally applicable to water utilities, including 
Elizabethtown and Mount Holly, include the Lead and Copper Rule (LCR), 
the MCLs established for various volatile organic compounds (VOCs), 
the MCLs proposed for radionuclides and the Surface Water Treatment 
Rule (SWTR). 

Lead and Copper Rule 

     The LCR requires Elizabethtown and Mount Holly to test the 
quantity of lead and copper in drinking water at the customer's tap 
and, if certain contaminant levels (action levels) are exceeded, to 
notify customers and initiate a public information campaign advising 
customers how to minimize exposure to lead and copper.  The LCR also 
requires Elizabethtown to add corrosion inhibitors to water to 
minimize leaching of lead from piping, faucets and soldered joints 
into water consumed at the tap.  Results from two separate tests 
completed during 1992 within Elizabethtown and Mount Holly's systems 
do not indicate lead and copper concentrations above the action 
levels.  Accordingly, public notification and a public information 
campaign have not been required.  Capital projects including corrosion 
inhibitor facilities for Elizabethtown will be completed later in 
1996.  Elizabethtown has requested that the costs of compliance be 
recovered in rates in the Company's pending rate proceeding. 

Volatile Organic Compounds 

     VOCs include various substances (primarily synthetic organic 
solvents) which have percolated into groundwater aquifers from surface 
sources.  Elizabethtown has found VOCs in excess of the applicable 
MCLs in certain of its wells and has either suspended the use of such 
wells or constructed aeration towers which remove such contaminants 
from the water by venting them into the atmosphere.  Because 
underground water flows are difficult to map, it is difficult to 
predict when and where contamination will occur in the future.  To the 
extent that contamination in excess of applicable MCLs occurs at wells 
lacking aeration towers, Elizabethtown will consider building such 
facilities if feasible and cost effective, or closing such wells, 
thereby increasing its reliance on surface water.  To date, Mount 
Holly has not been affected by VOC contamination.  

Radionuclides 

     Radionuclides are naturally occurring radioactive substances 
(primarily radon) found in groundwater.  Like VOCs, radon can be 
removed from groundwater using aeration towers.  If the MCLs proposed 
for all radionuclides are finally adopted, Elizabethtown believes that 
it will abandon wells with aggregate production capacity of 
approximately 5 MGD, thereby further increasing Elizabethtown's 
reliance on surface water. 

Surface Water Treatment Rule 

     The operation of Elizabethtown's existing Raritan-Millstone 
treatment plant is subject to the SWTR.  Elizabethtown has assessed 

                            -5-

the plant's sustainable production capacity, assuming operation 
consistent with the requirements of the SWTR, and determined that 
improvements to the existing plant are necessary. 

     Specifically, Elizabethtown has installed additional pumps to 
increase capacity and reliability at peak times and has constructed a 
new building to house offices and lab facilities.  Also, 
Elizabethtown is replacing existing chlorine gas disinfection 
facilities with liquid sodium hypochlorite to improve community and 
employee safety and will install corrosion inhibitor facilities in 
conformance with the LCR. 

TRANSMISSION AND DISTRIBUTION 

     As of December 31, 1995, Elizabethtown Water Company's 
transmission and distribution system included 2,869 miles of 
transmission and distribution mains.  Mains range in size up to 60 
inches, substantially all of which are either ductile iron, cast iron 
or prestressed concrete pipe.  Elizabethtown conducts an ongoing 
program costing approximately $1.0 million per year to clean and line 
its older cast iron mains.  Such costs are capitalized and have been 
included in rate base in stipulations settling recent rate cases.  

     As of December 31, 1995, Elizabethtown also had in service 
pumping equipment having capacities of 283 MGD for low lift pumping 
capacity, 577 MGD for system supply pumping capacity and 194 MGD for 
transfer booster pumping capacity.  Distribution storage facilities as 
of December 31, 1995 consisted of standpipes, elevated and ground 
storage tanks and reservoirs with an aggregate capacity of 82 MG.  
Such pumping, transmission and storage facilities are necessary to 
maintain adequate water pressures throughout the service territory.  
Failure to maintain pressures could adversely affect domestic service 
and impede local fire departments' efforts to fight fires, 
particularly during peak summer loads.  

     On an ongoing basis, Elizabethtown assesses the capacity of its 
system to maintain adequate pressures and initiates plans to construct 
pumping, transmission and storage facilities as needed.  

ENERGY SUPPLY 

     Elizabethtown pumps most of its water with electric power 
purchased from two major electric utilities.  The Company is replacing 
certain electric pumps with natural gas fired pumps to reduce energy 
costs.  Elizabethtown also has diesel powered pumping and generating 
facilities at its major treatment plants and at certain transfer 
stations to provide basic service during possible electrical 
shortages.  Elizabethtown has not, to date, experienced any shortage 
of electric energy or diesel fuel to operate its pumps and has 
cooperated with its electric suppliers 

                             -6-

during their peak periods by operating non-electrical pumping 
facilities upon request. 

ENVIRONMENTAL MATTERS 

     Elizabethtown and Mount Holly are also subject to regulation by 
the NJDEP with respect to water supply plans and specifications for 
the construction, improvement, alteration and operation of public 
water supply systems and with respect to the quality of any residuals  
from treatment plants. 

     As a normal by-product of treating surface water, Elizabethtown's 
existing surface water treatment plant generates silt removed from 
untreated river water plus residue from chemicals used in the 
treatment process.  Historically, Elizabethtown had disposed of this 
material in landfills.  As a result of revised regulations governing 
landfills, Elizabethtown has been reusing this material on site and is 
presently removing some material off-site for beneficial reuse.  Due to 
limited on-site storage capacity, Elizabethtown is investigating 
alternatives to dry the by-product for beneficial reuse.   

     During the late 1980's, Elizabethtown withdrew a well field from 
service because of increased groundwater contamination and more 
stringent water quality regulations.  Elizabethtown commissioned an 
engineering firm to determine whether it is feasible and cost 
effective to install treatment facilities so that those wells not 
presently complying with current regulations can be returned to 
service.  The study was also intended to evaluate whether the 
resumption of pumping would have any effect on the local water table.  
The study concluded that it is possible to treat the water at this 
location and resume pumping at a quality and yield that is 
satisfactory to Elizabethtown.  Elizabethtown is evaluating the 
cost-effectiveness of this approach in connection with a possible 
governmental grant to the municipality involved for such purpose.  
Preliminary cost estimates of treatment facilities necessary to return 
certain wells in this area to service are included in the Company's 
capital program.                                   

     Under New Jersey law, environmental matters are addressed by the 
NJDEP before diversion allowances or other water supply projects are 
authorized.  To date, Elizabethtown has been able to construct all 
plant facilities and obtain all diversion authorizations necessary to 
maintain customer service.  Mount Holly has also been able to 
construct all facilities and obtain all diversion authorizations with 
the exception of the pending objection to the diversion permit for the 
Mansfield Project as discussed above. 

                              -7-

<PAGE>
FRANCHISES 

     The property and franchises of Elizabethtown and Mount Holly are 
subject to rights of eminent domain of the State of New Jersey.  These 
rights have been delegated by statutes now in effect to municipalities 
or groups of municipalities and have been or may be delegated to 
various public agencies.  No such rights of eminent domain have been 
exercised since 1931. 

EMPLOYEE RELATIONS 

     As of December 31, 1995, the Corporation had a total of 398 
full-time employees, of which 210 were covered by union contracts.  
The contracts between the Company and the Utility Workers Union of 
America (A.F.L.-C.I.O.) were renegotiated on February 1, 1996 and will 
expire on January 31, 1999.  

     The Company considers relations with both union and non-union 
employees to be satisfactory. 

RATE MATTERS 

     Elizabethtown and Mount Holly are subject to regulation by the 
New Jersey Board of Public Utilities (BPU) with respect to the 
issuance and sale of securities, rates and service, classification of 
accounts, mergers, and other matters.  Elizabethtown and Mount Holly 
periodically seek rate relief to cover the cost of increased operating 
expenses, increases in financing expenses due to additional 
investments in utility plant, and other costs of doing business.  

Elizabethtown

     On November 20, 1995, Elizabethtown filed with the BPU for an 
increase in rates of $31.6 million, or 29.6%.  The largest portion of 
the request, $22.9 million, is needed to cover the cost to finance and 
operate the Plant.  The remainder of the rate increase, $8.7 million, 
is needed to cover the cost to finance additional construction 
projects and to cover increases in operating expenses since rates were 
last established in February 1995.  A decision by the BPU is expected 
in the summer of 1996.  In light of the approval by the BPU of the 
1993 Plant Stipulation and Elizabethtown's experience in obtaining 
base rate relief, Elizabethtown expects the BPU to grant timely and 
adequate rate relief, but cannot predict the ultimate outcome of any 
rate proceeding.

     As mentioned previously, the 1993 Plant Stipulation, approved in 
August 1993, states that the Plant is necessary and that the Company's 
estimates regarding the Plant's cost, at that time of $87 million, and 
construction period are reasonable.  In addition, the 1993 Plant 
Stipulation authorizes the Company to levy a rate surcharge if the 
Company's pre-tax interest coverage ratio for any 12-month historical 
period drops below 2.0 times.  The pre-tax interest coverage ratio has 
remained above the 2.0 times trigger level and therefore, the 
surcharge has not been required.  The 1993 Plant Stipulation also 
provides that the rate of return on common shareholder's equity used 
to calculate the rate for the equity component of the AFUDC for the 
Plant will be 1.5% less than the rate of return on common 
shareholder's equity established in the Company's most recent base 

                            -8-

rate case.  The authorized rate of return on common shareholder's 
equity is currently 11.5%. 

     In January 1995, the BPU approved a stipulation (1995 
Stipulation) for Elizabethtown for a rate increase of $5.3 million or 
5.34%, effective February 1, 1995.  The 1995 Stipulation provides for 
an authorized rate of return on common equity of 11.5%.  It also 
provides for recovery of the 1994 current service cost portion of the 
obligation accrued under Statement of Financial Accounting Standards 
No. 106, "Employer's Accounting for Postretirement Benefits Other Than 
Pensions," provided this amount is funded by the Company.  
Elizabethtown funded $.3 million in 1995 which represents the 1994 
current service cost allowed in the 1995 Stipulation.  The rate 
increase covered the cost to finance $62.0 million of construction 
projects since rates were last established in March 1993. These 
projects include treatment, transmission and storage facilities needed 
to ensure that Elizabethtown continues to meet federal and state 
regulations water quality and service.  The increase also offset 
increased costs for power, labor and benefits, primarily medical.  The 
1995 Stipulations also provides for an increase in annual depreciation 
expense of approximately $.5 million.  The 1995 Stipulation also 
required Elizabethtown to maintain a monthly average percentage of 
common equity to total capitalization of at least 45.1% for the 12 
months ended January 31, 1996.  The Company has met this requirement.

Mount Holly

     On June 26, 1995, Mount Holly petitioned the BPU for an increase 
in rates, to take place in two phases.  In the first phase rates would 
be increased by $.9 million and in the second phase by $2.8 million.  
The first phase is necessary to cover costs that were not reflected in 
rates last increased in October 1986.  The second phase would cover 
the cost of the Mansfield Project as discussed above.  

     On January 24, 1996, the BPU approved a stipulation (Mount Holly 
Stipulation) for an increase in rates of $.6 million effective as of 
that date.  The Mount Holly Stipulation has, effectively, concluded 
the first phase of the rate proceeding.  Mount Holly is continuing 
with the adjudicatory process with respect to the second phase of the 
petition.  While management believes that the water supply, treatment 
and transmission project planned for Mount Holly is the most 
cost-effective response to the state legislation affecting the area, 
management cannot predict the ultimate outcome of the rate proceeding 
at this time.

     For information regarding additional rate matters see Note 8 to 
the Notes to Consolidated Financial Statements contained in
Appendix I.

REAL ESTATE MATTERS 

     Properties and E'town currently own several parcels of land 
aggregating approximately 740 acres located in central New Jersey  

                             -9-

having an original acquisition cost of approximately $8 million.  
A portion of this acreage was purchased from a third party and the 
balance was land formerly owned by Elizabethtown and no longer needed 
for utility purposes.  These holdings are owned in fee. 

     The Corporation has no plans to acquire additional real estate.  
Over the next several years, the Corporation expects to work with 
local and state officials to obtain various approvals to enhance the 
value and development potential of its real estate holdings while 
minimizing expenditures.  

     Properties has entered into an agreement to sell a parcel of land 
to a developer.  The agreement requires the buyer to obtain all 
approvals required by governmental agencies in order to develop the 
property.  Properties may cancel the agreement if the closing does not 
occur by December 31, 1996.  Other events have been established during 
this period, at which time either the buyer or Properties may cancel 
the agreement if certain criteria, generally relating to the 
development potential of the property, are not met.

                            -10-

<PAGE>
     Executive Officers of the Corporation and Elizabethtown

        Name             Age              Positions Held 

Robert W. Kean, Jr.      73   Chairman and Chief Executive Officer of 
                              the Corporation since 1985 and 
                              Elizabethtown since 1973. 
       
Henry S. Patterson, II   73   President of the Corporation since March 
                              1985 and Properties since July 1987. 

Thomas J. Cawley         65   Vice Chairman of Elizabethtown since 
                              January 1996 and President of 
                              Elizabethtown and its subsidiary, Mount 
                              Holly since August 1992.  Executive Vice 
                              President of Elizabethtown since January 
                              1987 and Vice President of Mount Holly 
                              since 1973.  Previously, Vice President, 
                              Operations since 1975.   
                                        
Andrew M. Chapman        40   Chief Financial Officer of the 
                              Corporation since August 1989 and 
                              Treasurer of the Corporation since 
                              November 1990.  President of 
                              Elizabethtown since January 1996 and 
                              Executive Vice President of 
                              Elizabethtown from May 1994 to December 
                              1995.  He served as Senior Vice 
                              President of Elizabethtown from April 
                              1993 to May 1994, Chief Financial 
                              Officer of Elizabethtown from November 
                              1990 to December 1995 and Treasurer of 
                              Elizabethtown from August 1989 to May 
                              1994.  Prior to 1989, he was Director of 
                              the Office of Financial Management of 
                              the State of New Jersey, Department of 
                              Treasury and earlier, a Vice President 
                              at Shearson Lehman Brothers.                     

Anne Evans Estabrook     51   Vice President of the Corporation since 
                              September 1987.  Owner of the Elberon 
                              Development Co., (a real estate holding 
                              company) since 1984 and President of 
                              David O. Evans, Inc. (a construction 
                              company) since 1983.

Walter M. Braswell       46   Secretary of the Corporation, Properties 
                              and Elizabethtown since December 1990 
                              and Vice President and General Counsel 
                              of Elizabethtown since August 1988.  
                              Previously, Assistant Secretary and 
                              General Attorney of Elizabethtown since 
                              May 1983.     

Norbert Wagner           60   Senior Vice President-Operations of 
                              Elizabethtown since May 1992.  Vice 
                              President-Operations since March 1987, 
                              Chief Engineer since October 1978.    

Edward F. Cash           60   Vice President - Customer Services 
                              of Elizabethtown since 1977.  
                              Assistant Vice President Customer 
                              Services since 1973. 

                                   -11-
                                                   


<PAGE>
ITEM 2. Properties 

     All principal plants and other materially important units of 
property of Elizabethtown and Mount Holly are owned in fee.  The 
Company considers that the properties of Elizabethtown and Mount Holly 
are in good operating condition.  

ITEM 3. Legal Proceedings

     As previously reported, several lawsuits had been filed against 
Elizabethtown and other parties in connection with a fire that 
occurred in a storage facility in 1989 resulting in damage to property 
stored at that facility.  This matter was settled in 1995 resulting in 
a payment by Elizabethtown of approximately $.1 million.  A provision 
for this estimated liability was previously recorded.


     In the opinion of management, other litigation in which the 
Corporation or its subsidiaries is involved is in the ordinary course 
of business and will not have a material adverse effect on the 
consolidated financial condition of the Corporation.

ITEM 4. Submission of Matters to a Vote of Security Holders 

     None 

                            PART II 

ITEM 5. Market for the Corporation's Common Stock and Related
        Stockholder Matters 

     This information is included in Exhibit 13, filed herewith, and 
is incorporated herein by reference.  All of the common stock of 
Elizabethtown Water Company is owned by E'town. 

                              -12-



ITEM 6.  Selected Financial Data

________________________________
                                     E'town Corporation

                                     __________________

This information is included in Exhibit 13, filed herewith, and is incorporated 
herein by reference.

<TABLE>
                                  Elizabethtown Water Company
<CAPTION>
                                  


                                 1995        1994        1993        1992        1991

_______________________________________________________________________________________
<S>                           <C>         <C>        <C>          <C>         <C>
Utility Plant (Thousands)
Utility Plant - net........   $507,858    $437,456    $373,293    $347,253    $319,421
Construction Expenditures
  (excluding AFUDC)........     73,789      69,981      32,517      33,293      27,732
Total Assets (Thousands)...   $580,808    $502,848    $437,405    $386,880    $371,103

Capitalization (Thousands)
Shareholder's Equity.......   $176,685    $151,624    $125,765    $103,024    $ 85,877
Preferred Stock............     12,000      12,000      12,000      12,000      12,000
Debt (1)...................    208,952     164,951     141,952     147,841     154,984
Total Capitalization.......   $397,637    $328,575    $279,717    $262,865    $252,861

Capitalization Ratios
Common Stock...............         44%         46%         45%         39%         34%
Preferred Stock............          3%          4%          4%          5%          5%
Debt (1)...................         53%         50%         51%         56%         61%

Earnings Applicable to
 Common Stock (Thousands)..   $ 16,512    $ 13,369    $ 13,783    $ 11,099    $ 10,311

Operating Statistics
Revenues (Thousands)
General Customers..........   $ 67,455    $ 62,923    $ 63,100    $ 55,570    $ 54,071
Other Water Systems........     18,720      18,082      17,187      15,080      14,082
Industrial Wholesale.......      7,947       7,458       6,652       6,044       5,846
Fire Service/Miscellaneous.     14,276      13,570      13,057      12,473      12,087
Total Revenues.............   $108,398    $102,033    $ 99,996    $ 89,167    $ 86,086

Water Sales-Millions of Gallons (mg)
General Customers..........     23,999      23,551      23,883      22,062      22,659
Other Water Systems........     15,569      15,691      15,109      14,118      13,811
Industrial Wholesale.......      3,673       3,568       3,213       3,145       3,155
System Use and Unaccounted For   6,402       6,570       5,453       5,843       6,368
Total Water Sales               49,643      49,380      47,658      45,168      45,993

System Delivery by Source - mg
Surface....................     42,646      42,534      40,742      38,558      39,222
Wells......................      6,764       6,690       6,776       6,480       6,658
Purchased..................        233         156         140         130         113
Total System Delivery......     49,643      49,380      47,658      45,168      45,993

Millions of Gallons Pumped:
Average Day................        136         135         131         123         126
Maximum Day................        183         182         191         159         169
<FN>
_______________________________________________________________________________________
(1) Includes long-term debt, notes payable and current portion of long-term debt.
</TABLE>
                                       -13-


ITEM 7.       Management's Discussion and Analysis of 
              Consolidated Financial Condition and Results
              of Operations

                          E'town Corporation

     This information is included in Exhibit 13, filed herewith, and 
is incorporated herein by reference.

              Elizabethtown Water Company and Subsidiary

     The water utility operations of Elizabethtown Water Company 
(Elizabethtown or Company) and its subsidiary The Mount Holly Water 
Company (Mount Holly), presently constitute the major portion of 
E'town Corporation's (E'town or Corporation) assets and earnings.  
Mount Holly contributed 3% of Elizabethtown Water Company's 
consolidated operating revenues for 1995.  E'town, a New Jersey 
holding company, is the parent company of Elizabethtown Water Company 
and E'town Properties, Inc.  The following analysis sets forth 
significant events affecting the financial condition at December 31, 
1995 and 1994, and the results of operations for the years ended 
December 31, 1995, 1994 and 1993 for Elizabethtown Water Company.

LIQUIDITY AND CAPITAL RESOURCES 
Capital Expenditures Program 

    Capital expenditures were $73.8 million during 1995.  Capital 
expenditures for the three-year period ending December 31, 1998, are 
estimated to be $148.9 million, of which $128.4 million is for 
Elizabethtown and $20.5 million for Mount Holly.  A major portion of 
the capital outlays will occur in the first nine months of the 
three-year period as Elizabethtown completes its new water treatment 
plant.  After this project is completed in late 1996, the capital 
outlays for Elizabethtown are expected to return to levels experienced 
in the early 1990s.  Mount Holly expects to incur significant capital 
expenditures in 1997 as it constructs new water supply, treatment and 
transmission facilities as discussed below.  

Elizabethtown 

     Elizabethtown's capital program includes the construction of a 
new water treatment plant, the Canal Road Water Treatment Plant 
(Plant), near Elizabethtown's existing plant.  The Plant, which will 
have an initial rated production capacity of 40 million gallons per 
day (mgd) and has been designed to permit expansion to 200 mgd, is 
necessary to meet existing and anticipated customer demands and to 
replace groundwater supplies withdrawn from service as a result of 
more restrictive water quality regulations and groundwater 
contamination.  Expansion of the Plant's production capacity beyond 
40 mgd is not expected to occur in the foreseeable future.  
Elizabethtown's construction program also includes additional mains 

                                   -14-
and storage facilities necessary to serve existing and future 
customers.  

     In April 1994, Elizabethtown executed a lump-sum contract for the 
construction of the Plant.  The estimated cost of the Plant is 
approximately $100 million, excluding an Allowance for Funds Used 
During Construction (AFUDC).  The Company has expended $83.0 million, 
excluding AFUDC of $7.2 million on the Plant, as of December 31, 1995.  
The project is proceeding on schedule, the construction contract 
remains on budget and the project is expected to be completed during 
the third quarter of 1996. 

    In August 1993, the New Jersey Board of Public Utilities (BPU) 
approved a stipulation (1993 Plant Stipulation) signed by the 
Department of Ratepayer Advocate, the BPU staff and several of 
Elizabethtown's major wholesale customers, all of whom typically 
participate in Elizabethtown's rate cases.  The 1993 Plant Stipulation 
states the Plant is necessary and the Company's estimate regarding the 
Plant's cost, at that time $87 million and construction period are 
reasonable.  In April 1994, Elizabethtow-n notified all parties to the 
1993 Plant Stipulation that the estimated cost of the Plant had 
increased.  

     The 1993 Plant Stipulation authorizes Elizabethtown to levy a 
rate surcharge during the Plant's construction period if the Company's 
pre-tax interest coverage ratio for any 12-month historical period 
drops below 2.0 times.  The pre-tax interest coverage has remained 
above the 2.0 times trigger level and therefore, the surcharge has not 
been required.  The 1993 Plant Stipulation also provides that the rate 
of return on common shareholder's equity used to calculate the rate 
for the equity component of the AFUDC for the Plant will be 1.5% less 
than the rate of return on common shareholder's equity established in 
Elizabethtown's most recent base rate case.  The authorized rate of 
return on Elizabethtown's common shareholder's equity is currently 
11.5%. Elizabethtown has filed for a rate increase to reflect the 
financing and operating costs of the Plant which is expected to take 
effect when the Plant is completed later this year (see Economic 
Outlook). 

Mount Holly 

     To ensure an adequate supply of quality water from an aquifer 
serving parts of southern New Jersey, state legislation requires Mount 
Holly, as well as other suppliers obtaining water from designated 
portions of this aquifer, to reduce pumpage from its wells.  Mount 
Holly has received approval from the New Jersey Department of 
Environmental Protection (NJDEP) for its plan to develop a new water 
supply, treatment and transmission system necessary to obtain water 
outside the designated portion of the aquifer and to treat the water 
and pump it into the Mount Holly system.  This is referred to as the 
Mansfield Project.  The project is currently estimated to cost 
$16.5 million, excluding AFUDC, and is expected to be completed in 
1997.  The land for the supply and treatment facilities has been 
purchased and wells have been drilled and can produce the required 
supply.  
                                   -15-
Mount Holly has filed for rate relief relating to the Mansfield 
Project (see Economic Outlook).

     On October 5, 1995, the NJDEP granted Mount Holly a water 
allocation diversion permit for four wells that are to be the water 
supply for the Mansfield Project.  On October 20, 1995, New 
Jersey-American Water Company requested, and was subsequently granted, 
an adjudicatory hearing on the permit.  The Company and Mount Holly 
believe that the permit in question will be upheld but cannot predict 
the outcome of the objection.  In the event that the objection is 
successful and the permit is rescinded, Mount Holly would utilize the 
alternative plan of purchasing water from New Jersey-American Water 
Company.


CAPITAL RESOURCES 

    During 1995, Elizabethtown, including Mount Holly, financed 8.4% 
of its capital expenditures from internally generated funds (after 
payment of common stock dividends).  The balance was financed with a 
combination of proceeds from capital contributions from E'town (funded 
by sale of its Common Stock), tax exempt bonds issued through the New 
Jersey Economic Development Authority (NJEDA) and short-term 
borrowings under a revolving credit agreement discussed below. 

    For the three-year period ending December 31, 1998, Elizabethtown, 
including Mount Holly, estimates 34% of its capital expenditures will 
be financed with internally generated funds (after payment of common 
stock dividends).  The balance will be financed with a combination of 
capital contributions from the proceeds from the sale of E'town common 
stock, long-term debentures, proceeds of tax-exempt NJEDA bonds, 
short-term borrowings under the revolving credit agreement and other 
short-term financing.  -The NJEDA has granted preliminary approval for 
the financing of almost all of Elizabethtown's and Mount Holly's major 
projects over the next three years, including the Plant.  
Elizabethtown expects to pursue tax-exempt financing to the extent 
that final allocations are granted by the NJEDA.  The Company's senior 
debt is rated A3 and A by Moody's and Standard & Poor's, respectively. 

     In June 1995, E'town issued 660,000 shares of common stock for 
net proceeds of $16.9 million which were used to fund an equity 
contribution to Elizabethtown.  The equity contribution has been used 
to repay short-term debt that had been issued under Elizabethtown's 
revolving credit agreement to partially fund the Company's capital 
program, the predominant portion of which relates to the construction 
of the Plant.  During 1995, 248,846 shares of common stock were issued 
for proceeds of $6.4 million under E'town's Dividend Reinvestment and 
Stock Purchase Plan (DRP).  The proceeds are used on an ongoing basis 
to make capital contributions to Elizabethtown to partially fund its 
capital program. 

     In December 1995, Elizabethtown issued $40.0 million of 5.60% 
tax-exempt Debentures through the NJEDA.  The proceeds of the issue 

                                   -16-
were used to repay amounts outstanding under Elizabethtown's revolving 
credit agreement.

    During 1995, Elizabethtown obtained a portion of funds required 
for its capital program through borrowings under its revolving credit 
agreement (Agreement) with an agent bank and five additional banks.  
The Agreement provides up to $60.0 million in revolving short-term 
financing, which together with internal funds, other short-term 
financing, proceeds of future issuances of debt and preferred stock 
and capital contributions from E'town, is expected to be sufficient to 
finance Elizabethtown's and Mount Holly's capital needs through 1998.  
The Agreement allows Elizabethtown to borrow, repay and reborrow up to 
$60.0 million during the first three years, after which time 
Elizabethtown may convert any outstanding balances to a five-year 
fully amortizing term loan.  The Agreement further provides that, 
among other covenants, Elizabethtown must maintain a percentage of 
common and preferred equity to total capitalization of not less than 
35% and a pre-tax interest coverage ratio of at least 1.5 to 1.  As of 
December 31, 1995, the percentage o-f Elizabethtown's common and 
preferred equi-ty to total capitalization, calculated in accordance 
with the Agreement, was 47%.  For the 12 months ended December 31, 
1995, Elizabethtown's pre-tax interest coverage ratio, calculated in 
accordance with the Agreement, was 3.12 to 1.  At December 31, 1995, 
Elizabethtown had borrowings outstanding of $27.0 million under the 
Agreement at interest rates from 5.75% to 6.00%, at a weighted average 
rate of 5.94%. 

1994 and 1993

     In May 1994, E'town issued 690,000 shares of common stock for net 
proceeds of $18.2 million. The net proceeds were used to fund an 
equity contribution to Elizabethtown of $16.0 million.  This 
contribution had been used to partially fund Elizabethtown's 
construction program, the predominant portion of which related to the 
Plant.  During 1994, 273,159 shares of common stock were issued for 
proceeds of $7.1 million under E'town's DRP.  The proceeds were used 
to make capital contributions to Elizabethtown to partially fund its 
capital program.

    In March 1994, Elizabethtown issued 120,000 shares of $100 par 
value, $5.90 Cumulative Preferred Stock for proceeds of $12.0 million 
at an effective rate of 7.37%.  The proceeds were used to redeem 
$12.0 million of the Company's $8.75 Cumulative Preferred Stock.  The 
redemption premium of $1.0 million was paid from general Company 
funds. 

    In May 1993, E'town issued 575,000 shares of common stock for net 
proceeds of $16.6 million.  The net proceeds were used to fund equity 
contributions to Elizabethtown of $11.0 million in May 1993 and 
$2.8 million in September 1993.  Elizabethtown used a portion of such 
contributions to repay $7.0 million of short-term bank debt incurred 
for construction expenditures and invested the balance on a short-term 
basis to fund working capital requirements. 

                                   -17-
    During 1993, 200,878 shares of common stock were issued for 
proceeds of $6.0 million under E'town's DRP.  Such proceeds were used 
to fund equity contributions to Elizabethtown, primarily for 
Elizabethtown's capital expenditures. 

    In November 1993, Elizabethtown issued $50.0 million of 7 1/4% 
Debentures due November 1, 2028.  The proceeds of the issue were used 
to redeem $30.0 million of the Company's 8 5/8% Debentures due 2007 
and $20.0 million of the Company's 10 1/8% Debentures due 2018.  The 
aggregate redemption premiums of $2.7 million were paid from general 
Company funds. 

RESULTS OF OPERATIONS 

Earnings Applicable to Common Stock for 1995 were $16.5 million as 
compared to $13.4 million for 1994.  The combined effect of a $5.3 
million rate increase in February 1995 (discussed below), increases in 
AFUDC in 1995 and a non-recurring charge in 1994 all contributed to 
the increase between 1994 and 1995.

     Earnings Applicable to Common Stock for 1994 were $13.4 million 
as compared to $13.8 million for 1993.  A return to more normal summer 
weather and water consumption patterns, the combined effect of a 
non-recurring charge in 1994, and increases in operating and 
depreciation expenses since March 1993, when rates were last 
increased, all contributed to the decrease between 1993 and 1994.   

     Operating Revenues increased $6.4 million or 6.2% in 1995.  Of 
this increase, $4.6 million relates to the rate increase, discussed 
below, effective February 1995.  Increased consumption by retail 
customers and an increase in the number of customers increased 
revenues by $1.4 million.  Revenues from industrial customers 
resulting from consumption increased $.2 million while revenues from 
other water systems resulting from consumption decreased $.2 million.  
Revenues from fire service customers increased $.4 million.

    Operating Revenues increased $2.0 million or 2.0% in 1994.  Of 
this increase, $1.2 million relates to a rate increase discussed 
below, effective March 1993.  Sales to retail customers related to 
consumption decreased by $.9 million, primarily due to a return to 
more normal weather patterns during the spring and summer months of 
1994, compared to 1993.  However, despite the return to more normal 
weather patterns, sales to other water systems and to large industrial 
customers related to consumption increased by $.6 million and $.7 
million, respecti-vely.  Due to normal growth within the service 
territory, fire service revenues increased by $.4 million. 

    Operation Expenses increased $2.4 million or 5.9% in 1995.  The 
increase is due, primarily, to increased costs for labor, benefits and 
the cost of purchased water calculated in accordance with a Purchased 
Water Adjustment Clause (PWAC) (see Note 8 to the Notes to 
Consolidated Financial Statements.)  Benefit costs increased due to 
increases in the actuarially calculated pension expense and the cost 
of postemployment benefits, a portion of which is being expensed in 


                                   -18-
1995 as it is recognized in rates pursuant to the 1995 Stipulation 
effective February 1995 (see Economic Outlook). 

    Operation Expenses increased $2.2 million or 5.7% in 1994.  The 
increase is due, primarily, to increased costs for labor, benefits, 
miscellaneous expenses and the unit cost of raw water purchased from 
the New Jersey Water Supply Authority (NJWSA), which is reflected in 
the PWAC, in addition to the cost of chemicals to treat such water.  
Benefit costs increased due, primarily, to an increase in the 
actuarially calculated pension expense. 

     Maintenance Expenses decreased $.8 million or 12.4% in 1995.  The 
decrease is due, primarily, to the absence in 1995 of the unusually 
harsh winter weather that occurred in 1994.  Also, the results of 
preventive maintenance programs have contributed to an overall 
decrease in maintenance expenses.
 
    Maintenance Expenses increased $.9 million or 15.9% in 1994 due, 
primarily, to the effects of unusually harsh winter weather in the 
first quarter of 1994, in addition to an increased level of preventive 
maintenance at various operating facilities throughout the Company. 

    Depreciation Expense increased $.9 million or 12.1% in 1995 and 
$.6 million or 7.9% in 1994 due, primarily, to additional depreciable 
plant being placed in service during those periods.  Also, an increase 
in authorized depreciation rates as a result of the 1995 Stipulation, 
effective February 1995, accounted for $.4 million of the increase. 

    Revenue Taxes increased $.8 million or 6.6% in 1995 and 
$.2 million or 2.0% in 1994, due to additional taxes on the higher 
revenues discussed above.  

    Real Estate, Payroll and Other Taxes increased $.1 million or 2.0% 
and $.2 million or 8.1% in 1995 and 1994, respectively, due to 
increased payroll taxes resulting from labor cost increases.  

    Federal Income Taxes increased $.8 million or 11.5% in 1995 and 
decreased $.5 million or 6.3% in 1994 due to changes in the components 
of taxable income discussed herein.  In addition, in 1995 
Elizabethtown received tax refunds related to the years 1984 and 1985 
of $.1 million.

     Other Income increased $1.7 million in 1995 due, primarily, to an 
increase in the equity component of AFUDC of $1.8 million and a 
non-recurring litigation settlement of $.9 million in 1994 as 
discussed below.  These increases were offset by the federal income 
taxes associated with the various components.

    Other Income decreased less than $.1 million in 1994.  Included in 
this net decrease is a litigation settlement of $.9 million (see 
Note 11 to the Notes to Consolidated Financial Statements.)  In 
addition, increases in the equity component of AFUDC of $.7 million 
resulted from increased construction expenditures, primarily related 
to the Plant.  Other increases of $.3 million resulted from 

                                  -19-
miscellaneous items. Federal income taxes, as a result of all of the 
above, decreased less than $.1 million. 

     Total Interest Charges increased $.7 million or 6.8% in 1995 due, 
primarily, to an increase in interest expense of $2.1 million on 
increased borrowings under Elizabethtown's revolving credit agreement 
to finance the Company's ongoing capital program, the largest 
component of which is the Plant.  This amount was offset by an 
increase in the debt component of AFUDC of $1.6 million, also 
primarily related to the construction of the Plant.  In addition, in 
1995 Elizabethtown received interest on tax refunds related to 1984 
and 1985 of $.1 million.

    Total Interest Charges decreased $1.0 million or 9.1% in 1994 due, 
primarily, to savings from refinancing of long-term debt in 1993.  
Also, an increase in the debt component of AFUDC of $.5 million 
resulted in a reduction of interest expense.  
     
     Preferred Stock Dividends decreased less than $.1 million due to 
savings from the refinancing of the $8.75 series preferred stock with 
$5.90 series preferred stock in March 1994. 

ECONOMIC OUTLOOK 

    Earnings for Elizabethtown and Mount Holly for the next several 
years will be determined primarily by Elizabethtown's and Mount 
Holly's ability to obtain adequate and timely rate relief in 
connection with their additions to utility plant. 

Elizabethtown and Subsidiary 

    Over the last several years, governmental water quality and 
service regulations have required Elizabethtown and Mount Holly to 
make significant investments in water supply, water treatment, 
transmission and storage facilities, including the Plant and the 
Mansfield Project, to augment existing facilities.  This capital 
program is requiring regular external financing and rate relief.  
Currently, Elizabethtown and Mount Holly believe they are in 
compliance with all water quality standards in all material respects.

     In November 1995, Elizabethtown filed for a $31.6 million or 
29.6% rate increase primarily to cover the financing and operating 
costs of the Plant.  While Mount Holly received a $.6 million or 19.9% 
rate increase effective January 1996, deliberations regarding the 
portion of the rate case related to the Mansfield Project, in which 
Mount Holly is requesting an additional 84.2% rate increase, are 
ongoing and awaiting the award of the final water diversion permit.  
Accordingly, the timing and amount of rate increases obtained by 
Elizabethtown and Mount Holly, in response to the pending rate 
requests, will be a major factor affecting earnings in 1996 and 
beyond.  Once the new facilities, referred to above, are constructed 
and reflected in rates, Elizabethtown expects its internally generated 
cash flow to increase and capital outlays to return to levels 
experienced in the early 1990's.  As a result, the need for external 

                                       

                                   -20-
financing and rate relief should become less frequent.  Therefore, 
more so than in recent years, management's ongoing efforts to grow 
unit sales and control operating cost will benefit the customer by 
reducing the frequency of rate increases and will benefit shareholders 
by positively affecting earnings. 

     On November 20, 1995, Elizabethtown filed a petition with the BPU 
for an increase in rates of $31.6 million, or 29.6%.  The largest 
portion of the request, $22.9 million, is needed to cover the costs to 
finance and operate the Plant.  The remainder of the rate increase, 
$8.7 million, is needed to cover the cost to finance additional 
construction projects and to cover increases in operating expenses 
since rates were last established in February 1995.  A decision by the 
BPU is expected in the summer of 1996.  In light of the approval by 
the BPU of the 1993 Plant Stipulation and Elizabethtown's experience 
in obtaining base rate relief, Elizabethtown expects the BPU to grant 
timely and adequate rate relief, but cannot predict the ultimate 
outcome of any rate proceeding. 

     In January 1995, the BPU approved a stipulation (1995 
Stipulation) for Elizabethtown for a rate increase of $5.3 million or 
5.34%, effective February 1, 1995.  The 1995 Stipulation provides for 
an authorized rate of return on common equity of 11.5%.  It also 
provides for recovery of the 1994 current service cost portion of the 
obligation accrued under Statement of Financial Accounting Standards 
No. 106, "Employer's Accounting for Postretirement Benefits Other Than 
Pensions," provided this amount is funded by the Company.  
Elizabethtown funded $.3 million in 1995, which represents the 1994 
current service cost allowed in the 1995 Stipulation.  The rate 
increase is covering the cost to finance $62.0 million of construction 
projects since rates were last established in March 1993.  These 
projects include treatment, transmission and storage facilities needed 
to ensure that Elizabethtown continues to meet federal and state 
regulations on water quality and service.  The increase is also 
offsetting increased costs for power, labor and benefits, primarily 
medical.  The 1995 Stipulation also provides for an increase in 
depreciation rates resulting in an increase in annual depreciation 
expense of approximately $.5 million.  The 1995 Stipulation also 
required Elizabethtown to maintain a monthly average percentage of 
common equity to total capitalization of at least 45.1% for the 12 
months ended January 31, 1996.  The Company has met this requirement.

     On June 26, 1995, Mount Holly petitioned the BPU for an increase 
in rates, to take place in two phases.  In the first phase rates would 
be increased by $.9 million and in the second phase by $2.8 million.  
The first phase is necessary to cover costs that were not reflected in 
rates last increased in October 1986.  The second phase would cover 
the cost of the Mansfield Project as discussed above.  The project is 
currently estimated to cost $16.5 million.  Construction is expected 
to begin upon final issuance of the water allocation diversion permit 
from the NJDEP, and the project is expected to be completed in 1997.

                                   -21-
     On January 24, 1996, the BPU approved a stipulation (Mount Holly 
Stipulation) for an increase in rates of $.6 million effective as of 
that date.  The Mount Holly Stipulation has, effectively, concluded 
the first phase of the rate proceeding.  Mount Holly is continuing 
with the adjudicatory process with respect to the second phase of the 
petition.  While management believes that the water supply, treatment 
and transmission project planned for Mount Holly is the most 
cost-effective response to the state legislation affecting the area, 
management cannot predict the ultimate outcome of the rate proceeding 
at this time.

New Accounting Pronouncement

     See Note 2 of the Notes to Consolidated Financial Statements for 
a discussion of a new accounting standard that will become effective 
in 1996. 










                                   -22-
<PAGE>
Item 8. Financial Statements and Supplementary Data 

     The information for E'town is included in Exhibit 13, filed 
herewith, and is incorporated herein by reference. 

     The information for Elizabethtown Water Company is contained on 
pages 2 through 19 of Appendix I included herein. 

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 

     Information with respect to directors of E'town and Elizabethtown 
is included in E'town's Proxy Statement for the 1996 Annual Meeting of 
Stockholders, and is incorporated herein by reference. 

     Information regarding the executive officers of both E'town and 
Elizabethtown follows Item 1 in Part I of this Form 10-K. 

Item 11. Executive Compensation 

     This information for E'town and Elizabethtown is included in 
E'town's Proxy Statement for the 1996 Annual Meeting of Stockholders, 
and is incorporated herein by reference. 

Item 12. Security Ownership of Certain Beneficial Owners and
         Management 

     This information is included in E'town's Proxy Statement for the 
1996 Annual Meeting of Stockholders, and is incorporated herein by 
reference. 

Item 13. Certain Relationships and Related Transactions 

     This information for E'town and Elizabethtown is included in 
E'town's Proxy Statement for the 1996 Annual Meeting of Stockholders, 
and is incorporated herein by reference. 

                               PART IV 

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

(a)  The following documents are filed as part of this 
report: 


                                   -23-
<PAGE>
     1. Financial Statements: 

                    Elizabethtown Water Company 

     Statements of Consolidated Income for the years ended 
        December 31, 1995, 1994 and 1993. 

     Consolidated Balance Sheets as of December 31, 1995
        and 1994. 

     Statements of Consolidated Capitalization as of 
        December 31, 1995 and 1994. 

     Statement of Consolidated Shareholder's Equity for the 
        years ended December 31, 1995, 1994 and 1993. 

     Statements of Consolidated Cash Flows for the years 
        ended December 31, 1995, 1994 and 1993. 

     Notes to Consolidated Financial Statements. 

                          E'town Corporation

     A portion of the 1995 Annual Report to Shareholders which 
includes Management's Discussion and Analysis of Consolidated 
Financial Condition and Results of Operations, Consolidated Financial 
Statements, Notes to Consolidated Financial Statements, Independent 
Auditors' Report and Other Financial and Statistical Data is filed 
herewith as Exhibit 13 and is herein incorporated by reference. 

                     Elizabethtown Water Company 

     Elizabethtown Water Company's consolidated financial statements 
and notes thereto are included herein on pages 2 through 19 of 
Appendix I. 

                E'town and Elizabethtown Water Company 

     The Independent Auditors' Reports for E'town and 
Elizabethtown Water Company appear on page 28 herein and page 1 of 
Appendix I, respectively. 
                                    
    2.  Financial Statement Schedules: 
                                     







                                 -24-
<PAGE>
     All financial schedules required to be filed contain the same 
data and amounts for both E'town and Elizabethtown Water Company, 
except for Supplemental Schedule of Property, Plant and Equipment, 
which includes property, plant and equipment for each company. 

     Schedule II - Valuation and Qualifying Accounts for 
          the Years Ended December 31, 1995, 1994 and 1993. 

     Supplemental Schedule of Property, Plant and Equipment at 
          December 31, 1995 and 1994.

     Other schedules are omitted because of the absence of the 
conditions under which they are required or because the required 
information is included in the financial statements or the notes 
accompanying each company's financial statements. 

     3.  Exhibits 

          (a)  Exhibits for E'town and Elizabethtown Water 
               Company are listed in the Exhibit Index. 

          (b)  Reports on Form 8-K:  None 

                                       



























                                   -25-





                                 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.

March 29, 1996                                        E'TOWN CORPORATION

                                                  By: /s/ Robert W. Kean, Jr.

                                                      _________________________
                                                      Chairman, Chief Executive
                                                      Officer and Director

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 29, 1996.

Chairman, Chief Executive Officer
 and Director                                         /s/ Robert W. Kean, Jr.

                                                      _________________________


President and Director                                /s/ Henry S. Patterson, II

                                                      _________________________


Vice President and Director                           /s/ Anne Evans Estabrook

                                                      _________________________


Chief Financial Officer, Treasurer
and Director                                          /s/ Andrew M. Chapman

                                                      _________________________
(Principal Financial & Accounting Officer)

Director                                              /s/ Brendan T. Byrne

                                                      _________________________


Director                                              /s/ Thomas J. Cawley

                                                      _________________________


Director                                              /s/ John Kean

                                                      _________________________


Director                                              /s/ Robert W. Kean III

                                                      _________________________


Director                                              /s/ Arthur P. Morgan

                                                      _________________________


Director                                              /s/ Barry T. Parker

                                                      _________________________


Director                                              /s/ Hugo M. Pfaltz, Jr.

                                                      _________________________








Director                                              /s/ Chester A. Ring III

                                                      _________________________


                                 -26-



                                 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.

March 29, 1996                                       ELIZABETHTOWN WATER COMPAY

                                                  By: /s/ Robert W. Kean, Jr.

                                                      __________________________
                                                      Chairman, Chief Executive
                                                      Officer and Director

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 29, 1996.

Chairman, Chief Executive Officer
 and Director                                         /s/ Robert W. Kean, Jr.

                                                      __________________________


Vice Chairman and Director                            /s/ Thomas J. Cawley

                                                      __________________________


President and Director                                /s/ Andrew M. Chapman

                                                      __________________________


Vice President - Finance & Treasurer                  /s/ Gail P. Brady

                                                      __________________________
(Principal Financial Officer)

Controller                                            /s/ Dennis W. Doll

                                                      __________________________
(Principal Accounting Officer)

Director                                              /s/ Brendan T. Byrne

                                                      __________________________


Director                                              /s/ Anne Evans Estabrook

                                                      __________________________


Director                                              /s/ John Kean

                                                      __________________________


Director                                              /s/ Robert W. Kean III

                                                      __________________________


Director                                              /s/ Arthur P. Morgan

                                                      __________________________


Director                                              /s/ Barry T. Parker

                                                      __________________________


Director                                              /s/ Henry S. Patterson, II







                                                      __________________________


Director                                              /s/ Hugo M. Pfaltz, Jr.

                                                      __________________________


Director                                              /s/ Chester A. Ring III

                                                      __________________________
                                 -27-




INDEPENDENT AUDITORS' REPORT 

E'TOWN CORPORATION: 

We have audited the consolidated financial statements of E'town 
Corporation and its subsidiaries as of December 31, 1995 and 1994, and 
for each of the three years in the period ended December 31, 1995, and 
have issued our report thereon dated February 15, 1996; such 
consolidated financial statements and report are included in your 1995 
Annual Report to Shareholders and are incorporated herein by reference.  
Our audits also included the financial statement schedules of E'town 
Corporation and its subsidiaries, listed in Item 14.  These financial 
statement schedules are the responsibility of the Company's management.  
Our responsibility is to express an opinion based on our audits.  In our 
opinion, such financial statement schedules, when considered in relation 
to the basic consolidated financial statements taken as a whole, present 
fairly in all material respects the information set forth therein.  



/s/ Deloitte & Touche LLP

February 15, 1996
Parsippany, New Jersey

<PAGE>
                                  -28-




                                   E'TOWN CORPORATION              SCHEDULE II
                               ELIZABETHTOWN WATER COMPANY
                           VALUATION AND QUALIFYING ACCOUNTS




COLUMN A                       COLUMN B     COLUMN C   COLUMN D     COLUMN E

________                       ________     ________   ________     ________

                                            ADDITIONS
                              BALANCE AT   CHARGED TO             BALANCE AT
                              BEGINNING     COSTS AND                END
DESCRIPTION                   OF PERIOD     EXPENSES   DEDUCTIONS  OF PERIOD

_____________                 _________   ___________  __________  ___________


Reserve for Uncollectible
 Accounts:

Year Ended December 31, 1995   $463,000   $600,648   (A) $531,648   $532,000

Year Ended December 31, 1994   $434,000   $552,459   (A) $523,459   $463,000

Year Ended December 31, 1993   $377,000   $571,116   (A) $514,116   $434,000











_________________________________

(A) Write-off of uncollectible accounts, net of recoveries.


____________________________________________________________________________



                                                             SUPPLEMENTAL
                                                             SCHEDULE
                              E'TOWN CORPORATION
                         ELIZABETHTOWN WATER COMPANY
                        PROPERTY, PLANT AND EQUIPMENT
                        AT DECEMBER 31, 1995 AND 1994




                                           1995                  1994

                                        _________             _________
ELIZABETHTOWN WATER COMPANY:

____________________________
 UTILITY PLANT IN SERVICE:
   Intangible Plant                   $    250,766          $    250,766
   Source of Supply Plant               10,073,447             9,739,125
   Pumping Plant                        44,838,866            43,658,801
   Water Treatment Plant                53,070,107            46,008,913
   Transmission & Distribution Plant   378,216,166           354,703,279
   General Plant                        15,373,329            14,068,349
   Leasehold Improvements                  117,186               110,954
   Acquisition Adjustments                 632,388               632,388

                                      ____________          ____________
     Utility Plant in Service          502,572,255           469,172,575
  Construction Work in Progress        100,212,636            55,739,951

                                      ____________          ____________
      Total Utility Plant              602,784,891           524,912,526

 NON-UTILITY PROPERTY - net                 83,178                85,690


                                      ____________          ____________
          TOTAL                       $602,868,069          $524,998,216

                                      ____________          ____________

                                      ____________          ____________
E'TOWN CORPORATION:

___________________
 UTILITY PLANT (as above)             $602,784,891          $524,912,526

 NON-UTILITY PROPERTY - net             12,151,496            12,061,574



                                      ____________          ____________
          TOTAL                       $614,936,387          $536,974,100

                                      ____________          ____________

                                      ____________          ____________
<PAGE>
                            EXHIBIT INDEX 


Certain of the following exhibits, designated with an asterisk(*), are 
filed herewith.  The exhibits not so designated have heretofore been 
filed with the Commission and are incorporated herein by reference to 
the documents indicated in brackets following the description of such 
exhibits. 

                        E'town Corporation 

          Exhibit 
            No.               Description 

           3(a) -   Certificate of Incorporation of E'town 
                    Corp. 
                    [Registration Statement No. 33-42509, 
                    Exhibit 4(a)] 

           3(b) -   By-Laws of E'town Corp. [Form 10-K for the year 
                    1994, Exhibit 3(b)] 

           3(c) -   Certificate of Incorporation of E'town 
                    Properties, Inc. [Registration Statement 
                    No. 33-32143, Exhibit 4(j)] 

           3(d) -   By-Laws of E'town Properties, Inc. 
                    [Registration Statement No. 33-32143, 
                    Exhibit 4(n)] 

           4(a) -   Rights Agreement dated as of February 4, 
                    1991 between E'town and the Rights Agent 
                    [Registration Statement No. 33-38566, 
                    Exhibit 4(n)] 

           4(b) -   Indenture dated as of January 1, 1987 
                    from E'town Corporation to Boatmen's 
                    Trust, Trustee, relating to the 6 3/4% 
                    Convertible Subordinated Debentures due 
                    2012 [Registration Statement No. 
                    33-32143, Exhibit 4(a)] 
 
          10(a) -   Incentive Stock Option Plan 
                    [Registration Statement No. 2-99602, 
                    Exhibit 28(a)] 

          10(b) -   Savings and Investment Plan - 401(k) [Form 10-K 
                    for the year 1994, Exhibit 10(b)] 
                     
          10(c) -   Management Incentive Plan [Registration 
                    Statement No. 33-38566, Exhibit 10(i)]       

          10(d) -   E'town's 1987 Stock Option Plan 
                    [Registration Statement No. 33-42509, 
                    Exhibit 28] 

          Exhibit 
            No.               Description 

          10(e) -   E'town's 1990 Performance Stock Program 
                    [Registration Statement No. 33-46532, 
                    Exhibit 10(k)] 

          10(f) -   E'town's Dividend Reinvestment and Stock 
                    Purchase Plan [Registration No. 
                    33-56013, Exhibit 4(e)] 

          10(g) -   Change of Control Agreement [Form 10-Q for
                    the quarter ended March 31, 1995, Exhibit 10]

         *11    -   Statement Regarding Computation of Per 
                    Share Earnings 

         *13    -   Portion of the 1995 Annual Report to 
                    Shareholders which includes Management's 
                    Discussion and Analysis of Consolidated 
                    Financial Condition and Results of 
                    Operations, Consolidated Financial 
                    Statements, Notes to Consolidated 
                    Financial Statements, Independent 
                    Auditors' Report and Other Financial and 
                    Statistical Data and is herein 
                    incorporated by reference. 

         *23     -  Consent of Deloitte & Touche LLP, 
                    Independent Auditors  

         *27     -  E'town Corporation - Financial Data Schedule 

                            EXHIBIT INDEX 

          Certain of the following exhibits, designated with 
an asterisk(*), are filed herewith.  The exhibits not so 
designated have heretofore been filed with the Commission 
and are incorporated herein by reference to the documents 
indicated in brackets following the description of such 
exhibits. 

                        Elizabethtown Water Company 

         Exhibit               
            No.                Description 

           3(a)  -  Form of Restated Certificate of 
                    Incorporation of Elizabethtown Water 
                    Company [Form 10-K for the year ended
                    December 31, 1994, Exhibit 3(a)] 

           3(b)  -  By-Laws of Elizabethtown Water Company 
                    
           4(a)  -  Indenture dated as of November 1, 1994 
                    from Elizabethtown Water Company to The 
                    Bank of New York, Trustee, relating to 
                    the 7 1/4% Debentures due 2028. [Form 10-K  
                    for year ended December 31, 1994, Exhibit 4(a)] 
              
           4(b)  -  Indenture dated as of September 1, 1992 
                    from Elizabethtown Water Company to The 
                    Bank of New York, Trustee, relating to 
                    the 8% Debentures due 2022 [Form 10-K  
                    for year ended December 31, 1993, Exhibit 4(a)]

           4(c)  -  Indenture dated as of October 1, 1991 
                    from Elizabethtown Water Company to The 
                    Bank of New York, Trustee, relating to 
                    the 8 3/4% Debentures due 2021 
                    [Registration Statement No. 33-46532, 
                    Exhibit 4(f)] 

           4(d)  -  Indenture dated as of August 1, 1991 
                    from Elizabethtown Water Company to The 
                    Bank of New York, Trustee, relating to 
                    the 6.60% Debentures due 2021 
                    [Registration Statement No. 33-46532, 
                    Exhibit 4(g)] 

           4(e)  -  Indenture dated as of August 1, 1991 
                    from Elizabethtown Water Company to The 
                    Bank of New York, Trustee, relating to 
                    the 6.70% Debentures due 2021 
                    [Registration Statement No. 33-46532, 
                    Exhibit 4(h)] 

           4(f)  -  Indenture dated as of October 1, 1990 
                    from Elizabethtown Water Company to 
                    Citibank, N.A., Trustee, relating to the 
                    7 1/2% Debentures due 2020 [Registration 
                    Statement No. 33-38566, Exhibit 4(e)] 
                                                          
          Exhibit 
            No.                 Description 

           4(g)  -  Indenture dated as of December 1, 1989 
                    from Elizabethtown Water Company to 
                    Citibank, N.A., Trustee, relating to the 
                    7.20% Debentures due 2019 [Registration 
                    Statement No. 33-38566, Exhibit 4(f)] 

          *4(h)  -  Indenture dated as of December 1, 1995 
                    from Elizabethtown Water Company to 
                    The Bank of New York, Trustee, relating to the 
                    5.60% Debentures due 2025 

          10(a)  -  Contract for service to Middlesex Water 
                    Company. [Registration Statement No.
                    33-38566, Exhibit 10(a)] 

          10(b)  -  Contract for service to Edison Township. 
                    [Registration Statement No. 2-58262, 
                    Exhibit 13(c)] 

          10(c)  -  Contract for service to New 
                    Jersey-American Water Company. [Form 
                    10-K for the year ended December 31, 
                    1993, Exhibit 10(c)] 

          10(d)  -  Contract for service to City of 
                    Elizabeth. [Form 10-K for the year ended 
                    December 31, 1992, Exhibit 10(d)] 
                    
          10(e)  -  Contract for service to Franklin 
                    Township. [Registration Statement No. 
                    33-46532, Exhibit 10(e)] 

          10(f)  -  Contract with the New Jersey Water 
                    Supply Authority for the purchase of 
                    water from the Raritan Basin.  
                    [Registration Statement No. 33-32143, 
                    Exhibit 10(e)] 

          10(g)  -  Supplemental Executive Retirement Plan 
                    of Elizabethtown Water Company [Form 
                    10-K for the year ended December 31, 
                    1992, Exhibit 10(g)] 

          10(h)  -  Medical Reimbursement Plan of 
                    Elizabethtown Water Company [Form 10-K 
                    for the year ended December 31, 1992, 
                    Exhibit 10(h)] 

          10(i)  -  Supplemental Executive Retirement Plan of 
                    Elizabethtown Water Company [Form 10-Q 
                    for the year ended September 30, 1995, 
                    Exhibit 10] 
          Exhibit 
            No.               Description 

         *12(a)  -  Computation of Ratio of Earnings to 
                    Fixed Charges 
                                                                  
         *12(b)  -  Computation of Ratio of Earnings to 
                    Fixed Charges and Preferred Dividends 

         * 27    -  Elizabethtown Water Company - Financial Data 
                    Schedule.















                                                       APPENDIX I 



                      ELIZABETHTOWN WATER COMPANY 
                            AND SUBSIDIARY 


                  CONSOLIDATED FINANCIAL STATEMENTS 
                FOR THE YEARS ENDED DECEMBER 31, 1995, 
                           1994 AND 1993 AND 
                      INDEPENDENT AUDITORS' REPORT 















                                                      APPENDIX I















ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY

__________________________________________

TABLE OF CONTENTS

______________________________________________________________________



INDEPENDENT AUDITORS' REPORT

STATEMENTS OF CONSOLIDATED INCOME FOR THE YEARS ENDED
 DECEMBER 31, 1995, 1994 AND 1993

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1995 AND 1994

STATEMENTS OF CONSOLIDATED CAPITALIZATION AS OF
 DECEMBER 31, 1995 AND 1994

STATEMENTS OF CONSOLIDATED SHAREHOLDER'S EQUITY FOR THE
 YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

STATEMENTS OF CONSOLIDATED CASH FLOWS FOR THE YEARS ENDED
 DECEMBER 31, 1995, 1994 AND 1993

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


______________________________________________________________________







                                                  APPENDIX I 



INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDER AND BOARD OF DIRECTORS OF ELIZABETHTOWN WATER 
COMPANY:

We have audited the accompanying consolidated balance sheets and 
statements of consolidated capitalization of Elizabethtown Water Company 
and its subsidiary as of December 31, 1995 and 1994, and the related 
consolidated statements of income, shareholder's equity, and cash flows 
for each of the three years in the period ended December 31, 1995.  Our 
audits also included the financial statement schedules listed in the 
Index at Item 14.  These financial statements and financial statement 
schedules are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on the financial statements and 
financial statement schedules 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, such consolidated financial statements present fairly, 
in all material respects, the financial position of Elizabethtown Water 
Company and its subsidiary at December 31, 1995 and 1994, and the 
results of their operations and their cash flows for each of the three 
years in the period ended December 31, 1995 in conformity with generally 
accepted accounting principles.  Also, in our opinion, such financial 
statement schedules, when considered in relation to the basic 
consolidated financial statements taken as a whole, present fairly in 
all material respects the information set forth therein.



/s/ Deloitte & Touche LLP

February 15, 1996
Parsippany, New Jersey





                                      -1-




Elizabethtown Water Company and Subsidiary                          APPENDIX I

Statements of Consolidated Income

                                               Year Ended December 31,

                                      ________________________________________
                                          1995          1994          1993

                                      _____________ _____________ ____________

Operating Revenues                     $108,398,105  $102,032,505  $99,996,120

                                       ____________  ____________  ____________

Operating Expenses:
  Operation                              43,132,400    40,722,980   38,529,149
  Maintenance                             5,805,511     6,623,772    5,716,157
  Depreciation                            8,808,169     7,860,180    7,285,309
  Revenue taxes                          13,591,212    12,748,161   12,501,804
  Real estate, payroll and other taxes    2,771,716     2,717,067    2,513,891
  Federal income taxes (Note 3)           8,002,292     7,176,396    7,658,770

                                       ____________  ____________  ___________
        Total operating expenses         82,111,300    77,848,556   74,205,080

                                       ____________  ____________  ___________

Operating Income                         26,286,805    24,183,949   25,791,040

                                       ____________  ____________  ___________

Other Income:
  Litigation settlement (Note 11)                        (932,203)
  Gain on sale of land                                                 122,400
  Allowance for equity funds used
   during construction (Note 2)           2,976,290     1,178,133      445,339
  Federal income taxes (Note 3)          (1,159,218)     (237,599)    (258,024)
  Other-net                                 335,763       432,922      169,474

                                       ____________  ____________  ___________
        Total other income                2,152,835       441,253      479,189

                                       ____________  ____________  ___________

Total Operating and Other Income         28,439,640    24,625,202   26,270,229

                                       ____________  ____________  ___________

Interest Charges:
  Interest on long-term debt             10,892,129    10,774,008   11,527,301
  Other interest expense-net              2,343,903       175,507       77,921
  Capitalized interest (Note 2)          (2,445,093)     (867,101)    (391,895)
  Amortization of debt discount-net         323,557       319,646      224,383

                                       ____________  ____________  ___________
        Total interest charges           11,114,496    10,402,060   11,437,710

                                       ____________  ____________  ___________

Income Before Preferred Stock
  Dividends                              17,325,144    14,223,142   14,832,519
Preferred Stock Dividends                   813,000       854,047    1,050,000

                                       ____________  ____________  ___________

Earnings Applicable to Common Stock    $ 16,512,144  $ 13,369,095  $13,782,519

                                       ____________  ____________  ___________

                                       ____________  ____________  ___________

See Notes to Consolidated Financial Statements.



                                      -2-




Elizabethtown Water Company and Subsidiary                         APPENDIX I

Consolidated Balance Sheets

                                                            December 31,

                                                   ___________________________
Assets                                                 1995           1994

                                                   ____________   ____________

Utility Plant-at Original Cost:
 Utility plant in service                          $502,572,255   $469,172,575
 Construction work in progress                      100,212,636     55,739,951

                                                   ____________   ____________
       Total utility plant                          602,784,891    524,912,526
 Less accumulated depreciation and amortization      94,926,413     87,456,550

                                                   ____________   ____________
       Utility plant-net                            507,858,478    437,455,976

                                                   ____________   ____________



Non-utility Property                                     83,178         85,690

                                                   ____________   ____________




Current Assets:
 Cash and cash equivalents                            3,796,757      1,485,115
 Customer and other accounts receivable
  (less reserve: 1995, $532,000; 1994, $463,000)     16,943,725     12,350,802
 Unbilled revenues                                    7,443,656      7,161,483
 Materials and supplies-at average cost               1,912,015      1,724,969
 Prepaid insurance, taxes, other                      1,874,338      1,410,401
 Prepaid federal income taxes                                        1,344,630

                                                   ____________   ____________
       Total current assets                          31,970,491     25,477,400

                                                   ____________   ____________



Deferred Charges (Note 7):
 Prepaid pension expense (Note 10)                      580,534        926,142
 Waste residual management                              970,182        546,490
 Unamortized debt and preferred stock expenses        9,384,609      8,902,271
 Taxes recoverable through future rates (Note 3)     26,427,627     26,339,057
 Postretirement benefit expense (Note 10)             2,900,569      2,077,051
 Purchased water under recovery - net                    37,316        314,128
 Other unamortized expenses                             594,875        723,709

                                                   ____________   ____________
       Total deferred charges                        40,895,712     39,828,848

                                                   ____________   ____________
           Total                                   $580,807,859   $502,847,914

                                                   ____________   ____________

                                                   ____________   ____________


See Notes to Consolidated Financial Statements.


                                    -3-
Elizabethtown Water Company and Subsidiary                         APPENDIX I

Consolidated Balance Sheets

                                                            December 31,

                                                   ____________________________
Capitalization and Liabilities                         1995           1994

                                                   ____________   ____________

Capitalization (Notes 4 and 5):
 Common shareholder's equity                       $176,684,773   $151,624,255
 Cumulative preferred stock                          12,000,000     12,000,000
 Long-term debt-net                                 181,922,528    141,908,430

                                                   ____________   ____________
       Total capitalization                         370,607,301    305,532,685









                                                   ____________   ____________



Current Liabilities:
 Notes payable-banks (Note 5)                        27,000,000     23,000,000
 Long-term debt-current portion (Note 4)                 30,000         42,000
 Accounts payable and other liabilities              16,723,904     18,165,522
 Customers' deposits                                    305,349        278,895
 Municipal and state taxes accrued                   13,661,620     12,831,524
 Federal income taxes accrued                           533,286
 Interest accrued                                     2,937,637      2,828,464
 Preferred stock dividends accrued                       59,000         59,000

                                                   ____________   ____________
       Total current liabilities                     61,250,796     57,205,405

                                                   ____________   ____________



Deferred Credits:
 Customer advances for construction                  45,460,749     45,554,476
 Federal income taxes (Note 3)                       64,886,448     60,109,244
 Unamortized investment tax credits                   8,448,811      8,650,537
 Accumulated postretirement benefits (Note 10)        2,900,569      2,077,051

                                                   ____________   ____________
       Total deferred credits                       121,696,577    116,391,308

                                                   ____________   ____________



Contributions in Aid of Construction                 27,253,185     23,718,516

                                                   ____________   ____________

Commitments and Contingent Liabilities (Note 9)

                                                   ____________   ____________
           Total                                   $580,807,859   $502,847,914

                                                   ____________   ____________

                                                   ____________   ____________


See Notes to Consolidated Financial Statements.


                                    -4-




Elizabethtown Water Company and Subsidiary                         APPENDIX I


Statements of Consolidated Capitalization

                                                            December 31,

                                                   ____________________________
                                                       1995            1994

                                                   ____________    ____________

  Common Shareholder's Equity (Notes 4 and 5):
   Common stock without par value, authorized,
   10,000,000 shares; issued 1995 and 1994,
   1,974,902 shares                               $ 15,740,602    $ 15,740,602
   Paid-in capital                                 112,157,348      88,868,632
   Capital stock expense                              (484,702)       (484,702)
   Retained earnings                                49,271,525      47,499,723

                                                  ____________    ____________
     Total common shareholder's equity             176,684,773     151,624,255

                                                  ____________    ____________


  Cumulative Preferred Stock (Note 4):
   $100 par value, authorized, 200,000
    shares; $5.90 series, issued  and
    outstanding, 120,000 shares                     12,000,000      12,000,000

                                                  ____________     ___________


  Cumulative Preferred Stock:
   $25 par value, authorized, 500,000 shares;
   none issued


  Elizabethtown Water Company:
   7.20% Debentures, due 2019                       10,000,000      10,000,000
   7 1/2% Debentures, due 2020                      15,000,000      15,000,000
   6.60% Debentures, due 2021                       10,500,000      10,500,000
   6.70% Debentures, due 2021                       15,000,000      15,000,000
   8 3/4% Debentures, due 2021                      27,500,000      27,500,000
   8% Debentures, due 2022                          15,000,000      15,000,000
   5.60% Debentures, due 2025                       40,000,000
   7 1/4% Debentures, due 2028                      50,000,000      50,000,000


  The Mount Holly Water Company:
   Notes Payable (due serially through 2000)           117,500         144,300

                                                  ____________    ____________
    Total long-term debt                           183,117,500     143,144,300
    Unamortized discount-net                        (1,194,972)     (1,235,870)

                                                  ____________    ____________
    Total long-term debt-net                       181,922,528     141,908,430

                                                  ____________    ____________
          Total capitalization                    $370,607,301    $305,532,685

                                                  ____________    ____________

                                                  ____________    ____________


See Notes to Consolidated Financial Statements.










                                       -5-




Elizabethtown Water Company and Subsidiary                         APPENDIX I

Statements of Consolidated Shareholder's Equity


                                              Year Ended December 31,

                                      _______________________________________
                                         1995          1994            1993

                                      ____________   ___________   ___________


Common Stock:                         $ 15,740,602  $ 15,740,602  $ 15,740,602

                                      ____________  ____________  ____________


Paid-in Capital:
 Balance at Beginning of Year           88,868,632    63,522,594    43,713,297
 Capital contributed by parent company  23,288,716    25,346,038    19,809,297

                                      ____________  ____________  ____________
 Balance at End of Year                112,157,348    88,868,632    63,522,594

                                      ____________  ____________  ____________


Capital Stock Expense:                    (484,702)     (484,702)     (484,702)

                                      ____________  ____________  ____________


Retained Earnings:
 Balance at Beginning of Year           47,499,723    46,986,485    44,054,327
 Income Before Preferred Stock
  Dividends                             17,325,144    14,223,142    14,832,519
 Dividends on Common Stock             (14,740,342)  (12,855,857)  (10,850,361)
 Preferred Stock Dividends                (813,000)     (854,047)   (1,050,000)

                                      ____________  ____________  ____________
 Balance at End of Year                 49,271,525    47,499,723    46,986,485

                                      ____________  ____________  ____________

Total Common Shareholder's Equity     $176,684,773  $151,624,255  $125,764,979

                                      ____________  ____________  ____________

                                      ____________  ____________  ____________



See Notes to Consolidated Financial Statements.
















                                      -6-




Elizabethtown Water Company and Subsidiary                         APPENDIX I

Statements of Consolidated Cash Flows
                                                  Year Ended December 31,

                                          _____________________________________
                                             1995         1994         1993

                                          ___________  ___________  ___________
Cash Provided by Operating Activities:
Income Before Preferred Stock Dividends $ 17,325,144 $ 14,223,142 $ 14,832,519
Adjustments to reconcile net income
to net cash provided by operating
activities:
 Depreciation                              8,808,169    7,860,180    7,285,309
 Gain on sale of land                                                 (122,400)
 Decrease (increase) in deferred charges     327,562     (169,459)     260,600
 Deferred income taxes and investment
  tax credits-net                          4,486,908    4,256,534    3,332,558
 Allowance for debt and equity funds
  used during construction (AFUDC)        (5,421,383)  (2,045,234)    (837,234)
 Other operating activities-net              (61,590)    (130,902)    (449,792)
 Change in current assets and liabilities
  excluding cash, short-term investments
  and current portion of debt:
   Customer and other accounts receivable (4,592,923)    (462,817)    (840,485)
   Unbilled revenues                        (282,173)      86,839     (688,601)
   Accounts payable and other liabilities (1,415,164)   8,517,848      669,078
   Accrued/prepaid interest and taxes      2,353,248   (1,464,787)     232,741
   Other                                    (187,046)    (101,266)      (6,870)

                                        ____________ ____________ ____________
Net cash provided by operating activities 21,340,752   30,570,078   23,667,423

                                        ____________ ____________ ____________
Cash Provided by Financing Activities:
Decrease in funds held by Trustee for
 construction expenditures                                382,306    8,519,877
Proceeds from issuance of debentures      40,000,000                50,000,000
Proceeds from issuance of preferred stock              12,000,000
Redemption of preferred stock                         (12,000,000)
Debt and preferred stock issuance costs     (482,338)    (876,594)  (3,139,571)
Capital contributed by parent company     23,288,716   25,346,038   19,809,297
Repayment of long-term debt                  (38,800)     (42,000) (50,042,000)
Contributions and advances for
 construction-net                          3,440,942    3,453,604    1,909,905
Net increase (decrease) in notes
 payable-banks                             4,000,000   23,000,000   (5,500,000)
Dividends paid on common and
 preferred stock                         (15,448,342) (13,631,154) (11,900,361)

                                        ____________ ____________ ____________
Net cash provided by financing
   activities                             54,760,178   37,632,200    9,657,147

                                        ____________ ____________ ____________
Cash Used for Investing Activities:
Utility plant expenditures (excluding
 AFUDC)                                  (73,789,288) (69,980,619) (32,501,865)
Proceeds from sale of land                                             131,000

                                        ____________ ____________ ____________
Net cash used for investing activities   (73,789,288) (69,980,619) (32,370,865)

                                        ____________ ____________ ____________
Net Increase (Decrease) in Cash and
 Cash Equivalents                          2,311,642   (1,778,341)     953,705
Cash and Cash Equivalents at
 Beginning of Year                         1,485,115    3,263,456    2,309,751

                                        ____________ ____________ ____________
Cash and Cash Equivalents at End of Year$  3,796,757 $  1,485,115 $  3,263,456

                                        ____________ ____________ ____________

                                        ____________ ____________ ____________
Supplemental Disclosures of Cash Flow Information:
 Cash paid during the year for:
  Interest (net of amount capitalized)  $  7,833,355 $  9,952,838 $ 11,837,347
  Income taxes                             4,158,093    6,771,254    5,881,008
  Preferred stock dividends             $    708,000 $    805,475 $  1,050,000

See Notes to Consolidated Financial Statements.
                                        -7-

<PAGE>
                ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1.  ORGANIZATION
     Elizabethtown Water Company (Elizabethtown or Company) and its 
     wholly owned subsidiary, The Mount Holly Water Company (Mount 
     Holly), is a wholly owned subsidiary of E'town Corporation (E'town or 
     Corporation).  E'town, a New Jersey holding company, is the parent 
     company of Elizabethtown Water Company and E'town Properties, Inc. 
       
 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     Basis of Presentation
     The consolidated financial statements include Elizabethtown and its 
     subsidiary, Mount Holly.  Significant intercompany accounts and 
     transactions have been eliminated.  Elizabethtown and Mount Holly are 
     regulated water utilities and follow the Uniform System of Accounts, 
     as adopted by the New Jersey Board of Public Utilities (BPU).

     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.

     Utility Plant and Depreciation
     Income is charged with the cost of labor, materials and other expenses 
     incurred in making repairs and minor replacements and in maintaining 
     the properties.  Utility plant accounts are charged with the cost of 
     improvements and major replacements of property.  When depreciable 
     property is retired or otherwise disposed of, the cost thereof, plus 
     the cost of removal net of salvage, is charged to accumulated 
     depreciation.  Depreciation generally is computed on a straight-line 
     basis at functional rates for various classes of assets.  The 
     provision for depreciation, as a percentage of average depreciable 
     property, was 1.83% for 1995, 1.75% for 1994 and 1.74% for 1993.  The 
     1995 rate case (see Note 8) allowed an increase in depreciation rates 
     effective February 1, 1995.

     Allowance for Funds Used During Construction
     Elizabethtown and Mount Holly capitalize, as an appropriate cost of 
     utility plant, an Allowance for Funds Used During Construction 
     (AFUDC), which represents the cost of financing major projects during 
     construction.  AFUDC, a non-cash credit on the Statements of 
     Consolidated Income, is added to the construction cost of the project 
     and included in rate base and then recovered in rates during the 
     project's useful life.  AFUDC is comprised of a debt component 
     (credited to Interest Charges), and an equity component (credited to 
     Other Income) in the Statements of Consolidated Income.  AFUDC totaled 
     $5,421,383, $2,045,234 and $837,234 for 1995, 1994 and 1993, 
     respectively (see Note 8).

                                     -8-
     Revenues
     Revenues are recorded based on the amounts of water delivered to 
     customers through the end of each accounting period.  This includes an 
     accrual for unbilled revenues for water delivered from the time meters 
     were last read to the end of the respective accounting periods.

     Federal Income Taxes
     Elizabethtown Water Company files a consolidated federal tax return 
     with E'town.  Deferred income taxes are provided for timing 
     differences in the recognition of revenues and expenses for tax and 
     financial statement purposes to the extent permitted by the BPU.  
     Elizabethtown and Mount Holly account for prior years' investment tax 
     credits by the deferral method, which amortizes the credits over the 
     lives of the respective assets.  

     Customer Advances for Construction and Contributions in Aid of 
     Construction
     Customer Advances for Construction and Contributions in Aid of 
     Construction represent capital provided by developers for main 
     extensions to new real estate developments.  Some portion of Customer 
     Advances for Construction is refunded based upon the revenues that the 
     new developments generate.  Contributions in Aid of Construction are 
     Customer Advances for Construction that, under the terms of individual 
     main extension agreements, are no longer subject to refund.

     Cash Equivalents
     Elizabethtown Water Company considers all highly liquid debt 
     instruments purchased with maturities of three months or less to be 
     cash equivalents.

     New Accounting Pronouncement
     In March 1995, the Financial Accounting Standards Board issued 
     Statement of Financial Accounting Standards (SFAS) 121, "Accounting 
     for the Impairment of Long-Lived Assets and for Long-Lived Assets to 
     Be Disposed of," which is effective in 1996.  The statement requires 
     that long-lived assets be reviewed for impairment whenever events or 
     changes in circumstances indicate that the carrying amount of an asset 
     may not be recoverable.  The resultant impairment, if any, would be 
     measured based on the fair value of the asset.  The Company believes 
     that the adoption of SFAS 121 will not have any effect on the 
     Company's results of operations or financial position.
     
     Reclassification
     Certain prior year amounts have been reclassified to conform to the 
     current year's presentation.       






                                     -9-
3.   FEDERAL INCOME TAXES
     The computation of federal income taxes and the reconciliation of the 
     tax provision computed at the federal statutory rate (35%) with the 
     amount reported in the Statements of Consolidated Income follow:    
                                                    1995     1994     1993   
                                                  -------------------------
                                                    (Thousands of Dollars) 
                                                                         
     Tax expense at statutory rate                 $9,270   $7,573  $7,962      
     Items for which deferred taxes 
      are not provided:
       Capitalized interest                                    (2)      (2)    
       Difference between book and tax     
         depreciation                                 133       92      81 
       Investment tax credits                        (204)    (209)   (208)   
       Other                                          (37)     (40)     84
                                                   -----------------------
     Provision for federal income taxes            $9,162   $7,414  $7,917 
                                                   ======================= 
     The provision for federal income taxes 
      is composed of the following:     
     Current                                       $6,409   $5,087  $5,926    
     Tax collected on main extensions              (1,734)  (1,931) (1,341)    
     Deferred:
       Tax depreciation                             3,492    3,366   3,222 
       Capitalized interest                           800      384      72   
       Main cleaning and lining                       405      396     323
       Other                                           (8)     314     (91)   
     Investment tax credits-net                      (202)    (202)   (194)
                                                   -----------------------
     Total provision                               $9,162   $7,414  $7,917
                                                   =======================

     Effective January 1, 1993, the Company adopted SFAS 109, "Accounting 
     for Income Taxes."  SFAS 109 established accounting rules that changed 
     the manner in which income tax expense is determined for accounting 
     purposes.  SFAS 109 utilizes a liability method under which deferred 
     taxes are provided at the enacted statutory rate for all temporary 
     differences between financial statement earnings amounts and the tax 
     basis of existing assets or liabilities. 

     In connection with the adoption of SFAS 109, Elizabethtown and Mount 
     Holly recorded additional deferred taxes for water utility temporary 
     differences not previously recognized.  The increased deferred tax 
     liability was offset by a corresponding asset representing the future 
     revenue expected to be recovered through rates based on established 
     regulatory practice permitting such recovery.  

     In accordance with SFAS 109, deferred tax balances have been reflected 
     at E'town's current consolidated federal income tax rate, which is 
     35%.  




                                     -10-
<PAGE>
     The tax effect of significant temporary differences representing 
     deferred income tax assets and liabilities as of December 31, 1995 and 
     1994 is as follows:                                                   
                                                  
                                                  1995        1994   
                                               ---------------------
                                               (Thousands of Dollars)

     Water utility plant-net                   $(56,956)  $(53,517)
     Taxes recoverable through future rates      (9,250)    (9,219)
     Investment tax credit                        2,957      3,028 
     Prepaid pension expense                       (203)      (324)
     Capitalized interest                        (1,308)      (508)
     Other assets                                   654        557
     Other liabilities                             (780)      (126)
                                               -------------------
     Net deferred income tax liabilities       $(64,886)  $(60,109)
                                               ===================

     In 1995 Elizabethtown received tax refunds and interest related to the 
     years 1984 and 1985 that contributed to an increase in net income of 
     $206,948.

 4.  CAPITALIZATION
     In June 1995, E'town issued 660,000 shares of common stock for net 
     proceeds of $16,863,860.  The gross proceeds of $17,737,500 were used 
     to fund equity contributions to Elizabethtown totalling $16,900,000.  
     These equity contributions have been used to repay short-term debt 
     that had been issued under Elizabethtown's revolving credit agreement 
     (see below) to partially fund the Company's capital program, the 
     predominant portion of which relates to the construction of the Canal 
     Road Water Treatment Plant (Plant) (see Note 9).

     In May 1994, E'town issued 690,000 shares of common stock for net 
     proceeds of $18,218,471.  The net proceeds were used to fund an equity 
     contribution to Elizabethtown of $16,000,000.  This contribution had 
     been used to partially fund Elizabethtown's construction program, the 
     predominant portion of which related to the Plant.  

     E'town routinely makes equity contributions to Elizabethtown which 
     represent the proceeds of common stock issued under E'town's Dividend 
     Reinvestment and Stock Purchase Plan (DRP).  E'town contributed 
     $6,388,716 and $7,146,038 in 1995 and 1994, respectively, to 
     Elizabethtown from the proceeds of DRP issuances.

     Cumulative Preferred Stock 
     In March 1994, Elizabethtown issued 120,000 shares of $100 par value, 
     $5.90 Cumulative Preferred Stock for proceeds of $12,000,000 at an 
     effective rate of 7.37%.  The proceeds were used to redeem $12,000,000 
     of the Company's $8.75 Cumulative Preferred Stock.  The redemption 
     premium of $1,050,000 was paid from general Company funds and is being 
     amortized over 10 years for ratemaking purposes.

     The $5.90 Cumulative Preferred Stock is not redeemable at the option 
     of Elizabethtown.  Elizabethtown is required to redeem all 120,000 
     shares of the Preferred Stock on March 1, 2004 at $100 per share. 
     
     Long-term Debt
     Elizabethtown's long-term debt indentures restrict the amount of 
     retained earnings available to Elizabethtown to pay cash dividends 
     (which is the primary source of funds available to the Corporation for 
     payment of dividends on its common stock), or acquire Elizabethtown's 
     

                                     -11-
     common stock, all of which is held by E'town.  At December 31, 1995,    
     $7,753,084 of Elizabethtown's retained earnings were restricted under 
     the most restrictive indenture provision.  Therefore, $35,241,659 of 
     E'town's consolidated retained earnings were unrestricted.

     In December 1995, Elizabethtown issued $40,000,000 of 5.60% tax-exempt 
     debentures through the New Jersey Economic Development Authority 
     (NJEDA). The proceeds of the issue were used to repay amounts 
     outstanding under a revolving credit agreement (see Note 5). 

5.   LINES OF CREDIT
     In 1994, Elizabethtown executed a committed revolving credit agreement 
     (Agreement) with an agent bank and five additional banks that replaced 
     the Company's uncommitted lines of credit.  The Agreement provides up 
     to $60,000,000 in revolving short-term financing, which together with 
     internal funds, other short-term financing, proceeds of future 
     issuances of debt and preferred stock by Elizabethtown and capital 
     contributions from E'town, is expected to be sufficient to finance 
     Elizabethtown's and Mount Holly's capital needs, which are estimated 
     to be $148,905,000 through 1998.  At December 31, 1995, Elizabethtown 
     had outstanding borrowings of $27,000,000 under the Agreement at 
     interest rates from 5.75% to 6.00%, at a weighted average rate of 
     5.94%.

     The Agreement allows Elizabethtown to borrow, repay and reborrow up to
     $60,000,000 during the first three years, after which time 
     Elizabethtown may convert any outstanding balances to a five-year, 
     fully amortizing term loan.  The Agreement further provides that, 
     among other covenants, Elizabethtown must maintain a percentage of 
     common and preferred equity to total capitalization of not less than 
     35% and a pre-tax interest coverage ratio of at least 1.5 to 1.  As of 
     December 31, 1995, the percentage of Elizabethtown's common and 
     preferred equity to total capitalization, as calculated in accordance 
     with the Agreement, was 47%.  For the 12 months ended December 31, 
     1995, Elizabethtown's pre-tax interest coverage ratio, calculated in 
     accordance with the Agreement, was 3.12 to 1.

     Elizabethtown has $17,000,000 of uncommitted lines of credit with 
     several banks in addition to the lines under the Agreement.

     Information relating to bank borrowings for 1995, 1994 and 1993 is as 
     follows:
                                                 1995        1994        1993 
                                               -------------------------------
                                                    (Thousands of Dollars)    

     Maximum amount outstanding..........      $60,000    $23,000       $7,000
     Average monthly amount outstanding..      $39,636    $ 2,958       $2,062
     Average interest rate at year end...          5.9%       6.1%          (A)
     Compensating balances at year end...         $  0     $    0      $   195
     Weighted average interest rate based
      on average daily balances..........          6.2%       5.7%         3.8%

     (A) No outstanding bank borrowings at year end.


                                        -12-

6.   FINANCIAL INSTRUMENTS
     The carrying amounts and the estimated fair values, as of 
     December 31, 1995 and 1994, of financial instruments issued or held by 
     the Company, are as follows:           
                                                1995           1994    
                                            ------------------------
                                              (Thousands of Dollars)
     Cumulative preferred stock (1):         
       Carrying amount                      $ 12,000        $ 12,000     
       Estimated fair value                   11,940          10,860
     Long-term debt (1):                      
       Carrying amount                      $181,923        $141,908
       Estimated fair value                  189,664         129,355

     (1) Estimated fair values are based upon quoted market prices for 
         these or similar securities. 

7.   REGULATORY ASSETS AND LIABILITIES 
     Certain costs incurred by Elizabethtown and Mount Holly which have 
     been deferred have been recognized as regulatory assets and are 
     being amortized over various periods as set forth below:

                                                 1995          1994  
                                             -----------------------
                                              (Thousands of Dollars)

     Waste residual management               $    970  $      546
     Unamortized debt and 
       preferred stock expense                  9,385       8,902
     Taxes recoverable through 
       future rates (Note 3)                   26,428      26,339
     Postretirement benefit expense 
       (Note 10)                                2,901       2,077
     Purchased water under      
       recovery-net (Note 8)                       37         314
                                              -------------------
                    Total                     $39,721     $38,178
                                              ===================

     Waste Residual Management
     The costs of disposing of the waste generated by Elizabethtown's
     and Mount Holly's water treatment plants are being amortized
     over three-year periods for ratemaking and financial statement
     purposes. No return is being earned on these deferred balances.

     Unamortized Debt and Preferred Stock Expenses
     Costs incurred in connection with the issuance or redemption of 
     long-term debt have been deferred and are being amortized over the 
     lives
     of respective issues for ratemaking and financial statement purposes.  
     Costs incurred in connection with the issuance and redemption of 
     preferred stock have been deferred and are being amortized over a 
     10-year period for ratemaking and financial statement purposes.  

     There were no regulatory liabilities at December 31, 1995 or 1994.
     
8.   REGULATORY MATTERS 
     Rates
     Elizabethtown
     On November 20, 1995, Elizabethtown filed a petition with the BPU for 
     an increase in rates of $31,634,500 or 29.6%.  The largest portion of 
     the request, $22,925,227, is to cover the cost to finance and operate 
     the Plant (see Note 9).  The remainder of the rate request, $8,709,273 
     
                                     -13-

     is needed to cover the cost to finance additional construction 
     projects and to cover increases in operating expenses since rates were 
     last established in February 1995.  A decision by the BPU is expected 
     in the summer of 1996.  In light of the approval by the BPU of the 
     1993 Plant Stipulation (discussed below) and Elizabethtown's 
     experience in obtaining base rate relief, Elizabethtown expects the 
     BPU to grant timely and adequate rate relief, but cannot predict the 
     ultimate outcome of any rate proceeding.
     
     In February 1996, Elizabethtown filed a petition with the BPU for a 
     decrease in rates of $390,318 under a Purchased Water Adjustment 
     Clause (PWAC).  This procedure, established by BPU rules, allows 
     Elizabethtown to reflect in rates a change in the cost of water 
     purchased from the New Jersey Water Supply Authority (NJWSA) without a 
     complete rate case.  The purpose of this request is to reflect in 
     rates the expected decrease in the rate for water purchased by 
     Elizabethtown from the NJWSA effective July 1, 1996. 
     
     In August 1993, the BPU approved a stipulation (1993 Plant 
     Stipulation) signed by the Department of Ratepayer Advocate, the BPU 
     staff and several of Elizabethtown's major wholesale customers, all of 
     whom typically participate in Elizabethtown's rate cases.  The 1993 
     Plant Stipulation states that the Plant is necessary and that the 
     Company's estimates regarding the Plant's cost ($87,000,000 at that 
     time) and construction period are reasonable (see Note 9).  In April 
     1994, Elizabethtown notified all parties to the 1993 Plant Stipulation 
     that the estimated cost of the Plant had increased.  The 1993 Plant 
     Stipulation authorizes the Company to levy a rate surcharge during 
     the Plant's construction period if the Company's pre-tax interest 
     coverage ratio for any 12-month historical period drops below 
     2.0 times.  The 1993 Plant Stipulation also provides that the rate of 
     return on common shareholder's equity used to calculate the rate for 
     the equity component of the AFUDC for the Plant will be 1.5% less than 
     the rate of return on common shareholder's equity established in 
     the Company's most recent base rate case.  The authorized rate of 
     return on common shareholder's equity is currently 11.5%.  
     
     In January 1995, the BPU approved a stipulation (1995 Stipulation) for 
     Elizabethtown for a rate increase of $5,300,000, or 5.34%, effective 
     February 1, 1995.  The 1995 Stipulation provides for an authorized 
     rate of return on common equity of 11.5%.  It also provides for 
     recovery of the current service cost portion of the obligation accrued 
     under SFAS 106, "Employer's Accounting for Postretirement Benefits 
     Other Than Pensions," provided this amount is funded by the Company 
     (see Note 10).  The rate increase is covering the cost to finance 
     $62,000,000 of construction projects that were not reflected in the 
     rates established in March 1993.  These projects include treatment, 
     transmission and storage facilities needed to ensure that 
     Elizabethtown continues to meet federal and state regulations on water 
     quality and service.  The increase is also offsetting increased costs 
     for power, labor and benefits, primarily medical. The 1995 Stipulation 
     also provides for an increase in depreciation rates resulting in an 
     increase in depreciation expense of approximately $469,000.  The 1995 
     Stipulation also required Elizabethtown to maintain a percentage of 
     common equity to total capitalization of at least 45.1% for the 12 
     months ended January 31, 1996.  The Company has met this requirement.  

     On July 7, 1995, the BPU approved a Stipulation for a decrease in 
     rates under a PWAC.  The Stipulation resulted in a decrease in rates 
                                              
                                          -14-
     for the PWAC, effective July 13, 1995 of $348,527.  This 
     Stipulation reflects the decrease in rates for water purchased 
     from the NJWSA.

     In June 1994, the BPU approved a Stipulation for an increase in rates 
     under a PWAC.  The Stipulation resulted in an increase in rates, 
     effective July 1, 1994, of $334,611, reflecting the increase in rates 
     for water purchased from the NJWSA.

     Mount Holly
     On June 26, 1995, Mount Holly petitioned the BPU for an increase in 
     rates, to take place in two phases.  In the first phase rates would be 
     increased by $851,171 and in the second phase by $2,794,002.  The 
     first phase is necessary to cover costs that were not reflected in 
     rates last increased in October 1986.  The second phase would cover 
     the cost of a new water supply, treatment and transmission system 
     necessary to obtain water outside a designated portion of an aquifer 
     currently used by Mount Holly and to treat and pump the water into the 
     Mount Holly distribution system.  Management believes this project is 
     the most cost-effective  alternative available to Mount Holly to 
     comply with recent state legislation which restricts the amount of 
     water that can be withdrawn from an aquifer in certain areas of 
     southern New Jersey.  The project is currently estimated to cost 
     $16,500,000.  The land for the supply and 
     treatment facilities has been purchased and wells have been drilled 
     and can produce the required supply.  On October 5, 1995, the New 
     Jersey Department of Environmental Protection granted Mount Holly a 
     water allocation diversion permit for four wells that are to be the 
     water supply for the Mansfield Project. On October 20, 1995, New 
     Jersey-American Water Company requested, and was subsequently granted, 
     an adjudicatory hearing on the permit.  The Company and Mount Holly 
     believe that the permit in question will be upheld, but cannot 
     predict the outcome of the objection. In the event that the 
     objection is successful and the permit is rescinded, Mount Holly 
     would utilize the alternative plan of purchasing water from New 
     Jersey-American Water Company.

     On January 24, 1996, the BPU approved a stipulation (Mount Holly 
     Stipulation) for an increase in rates of $550,000, effective as of 
     that date.  The Mount Holly Stipulation has, effectively, concluded
     the first phase of the rate proceeding.  Mount Holly is continuing 
     with the process with respect to the second phase of the petition.  
     While management believes that the water supply, treatment and 
     transmission system planned for Mount Holly is the most cost-effective 
     response to the state legislation affecting the area, we cannot 
     predict the ultimate outcome of the rate proceeding at this time.

     Main Extension Refunds
     Previous disclosures have detailed events surrounding several lawsuits 
     filed by developers with respect to the BPU's suggested refund formula 
     for particular main extension agreements.  The BPU's formula suggests 
     refunds of 2 1/2 times annual revenues for each metered connection for 
     water service.  The plaintiffs had received refunds in accordance with 
     this suggested formula.  The initial petitions by the developers and 
     the related litigation have been ongoing since 1984 with numerous BPU 
     decisions, Appellate Division decisions and a New Jersey Supreme Court 
     decision.


                                         -15-
     In June 1995, the New Jersey Supreme Court once again reviewed these 
     matters and declined to hear the final appeal of the developers.  
     
     Effectively, the BPU's suggested refund formula has been reaffirmed 
     and therefore no refunds in excess of the 2 1/2 times revenues formula 
     are required by the Company.  Based upon the New Jersey Supreme 
     Court's decision, the plaintiffs have withdrawn their suits.

9.   COMMITMENTS
     Elizabethtown is obligated, under a contract that expires in 2013, to 
     purchase from the NJWSA a minimum of 37 billion gallons of water 
     annually.  The Company purchases additional water from the NJWSA on an 
     as-needed basis.  Effective July 1, 1996, the annual cost under the 
     contract will be $7,861,486.  The total cost of water purchased from 
     the NJWSA, including additional water purchased on an as-needed 
     basis, was $9,344,792, $8,987,472 and $8,819,212 for 1995, 1994 and 
     1993, respectively.    

     The following is a schedule by years of future minimum rental payments 
     required under noncancelable operating leases with terms in excess of 
     one year at:
                                        December 31,               
                                   ----------------------
                                   (Thousands of Dollars)

                        1996                $  909 
                        1997                   859
                        1998                    12
                        1999                   -0-                        
                        2000                   -0-
                                            ------
                        Total               $1,780
                                            ======

     Rent expense totaled $820,481, $829,562 and $789,636 for 1995, 1994 
     and 1993, respectively.

     Capital expenditures through 1998 are estimated to be $148,905,000 
     for Elizabethtown's and Mount Holly's utility plant.

     Canal Road Water Treatment Plant                                  
     In April 1994, following a competitive bidding process, Elizabethtown 
     executed a lump-sum contract for the construction of the Canal Road 
     Water Treatment Plant.  The project is currently estimated to cost 
     $100,000,000, excluding AFUDC.   The project is being completed on 
     schedule and the construction contract is on budget.  The Company 
     has expended $82,952,434, excluding AFUDC of $7,167,396, on the Plant 
     as of December 31, 1995.  Construction is expected to be completed 
     in the third quarter of 1996.

10.  PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS
     Elizabethtown has a trusteed, noncontributory Retirement Plan (Plan), 
     which covers most employees.  Under the Company's funding policy, the 
     Company makes contributions that meet the minimum funding 
     requirements of the Employee Retirement Income Security Act of 1974.  
                                              

                                          -16-
  The components of the net pension costs (credits) are as follows:

                                                   1995      1994     1993
                                                 -------------------------
                                                   (Thousands of Dollars)
Service cost--benefits earned during the year ..  $  915   $1,052   $   899
Interest cost on projected benefit obligation ..   2,156    1,946     1,973
Return on Plan assets ..........................  (7,587)     939    (1,409)
Net amortization and deferral ..................   4,862   (3,860)   (1,658)
                                                  -------------------------
Net pension costs (credits) ....................  $  346   $   77   $  (195)
                                                  =========================
                                          

     
Plan assets are invested in publicly traded debt and equity securities.        
The reconciliations of the funded status of the Plan to the amounts 
recognized in the Consolidated Balance Sheets are presented below:  

                                                       1995     1994     
                                                   ----------------------
                                                   (Thousands of Dollars)

Market value of Plan assets                           $36,957  $30,810  
Actuarial present value of Plan benefits:             ----------------
Vested benefits                                        25,986   20,776
Non-vested benefits                                       101      157
                                                      ----------------
Accumulated benefit obligation                         26,087   20,933
Projected increases in compensation levels              7,877    5,642
                                                      ----------------
Projected benefit obligation                           33,964   26,575
Excess of Plan assets over projected benefit          ----------------
  obligation                                            2,993    4,235
Unrecognized net gain                                    (620)  (1,337)
Unrecognized prior service cost                           363      451
Unrecognized transition asset                          (2,156)  (2,423) 
                                                      ----------------
Prepaid pension expense                               $   580  $   926    
                                                      ================

  The assumed rates used in determining the actuarial present value of the 
  projected benefit obligations were as follows:
                                                1995       1994     1993   
                                                ------------------------
       Discount rate                            7.00%     8.00%    7.00%
       Compensation increase                    5.50%     5.50%    5.50%
       Rate of return on Plan assets            9.00%     8.50%    8.50% 

  The Company provides certain health care and life insurance benefits for 
  substantially all of its retired employees. As a result of a contract 
  negotiated in February 1996 with the Company's bargaining unit, all union 
  and non-union employees retiring after January 1, 1997 will pay 25% of 
  future increases in the premiums the Company pays for postretirement 
  medical benefits.
 
  Effective January 1, 1993, the Company adopted SFAS 106.  Under SFAS 106, 
  the costs of postretirement benefits are accrued for each year the 
  employee renders service, based on the expected cost of providing such 
  benefits to the employee and the employee's beneficiaries and covered 
  dependents, rather than expensing these benefits on a pay-as-you-go basis 
  for retired employees.

                                            

                                        -17-
  Based upon an independent actuarial study, the transition obligation, 
  calculated under SFAS 106, was $7,214,736 as of January 1, 1993.  The 
  transition obligation is being amortized over 20 years.  The following table 
  details the postretirement benefit obligation at December 31:

                                                   1995       1994  
                                               ----------------------
                                               (Thousands of Dollars)

     Retirees                                     $2,404     $2,457
     Fully eligible plan participants              6,263      5,080      
                                                  -----------------
     Accumulated postretirement benefit 
       obligation                                  8,667      7,537
     Plan assets at fair value                      (320)         0
     Unrecognized net gain                           685      1,033 
     Unrecognized transition obligation           (6,131)    (6,493)
                                                  -----------------
     Accrued postretirement benefit     
        obligation                                $2,901     $2,077
                                                  =================            
                                                                   
  The assumed health care cost trend rate used in measuring the accumulated 
  postretirement benefit obligation as of December 31, 1995, and for 1995, was 
  12%.  This rate decreases linearly each successive year until it reaches 5% 
  in 2005, after which the rate remains constant.  The assumed rates used 
  in determining the actuarial present value of the projected benefit 
  obligations were as follows:
                                             1995      1994      1993 
                                            -------------------------
     Discount rate                           7.00%     8.00%     7.00%

     A single percentage point increase in the assumed health care cost trend 
     rate for each year would increase the accumulated postretirement benefit 
     obligation as of December 31, 1995, and net postretirement service and 
     interest cost by approximately $1,260,000 and $250,000, respectively. 

     Based upon the independent actuarial study referred to above, the annual 
     postretirement cost calculated under SFAS 106 is as follows:

                                              1995         1994       1993  
                                              ----------------------------
                                                 (Thousands of Dollars)
  Service cost - benefits earned 
    during the year                         $  474       $  369       $   249
  Interest cost on accumulated
    postretirement benefit obligation          579          592           602
  Amortization of transition obligation        360          361           361
                                            ---------------------------------
         Total                               1,413        1,322         1,212
  Deferred amount for regulated
    companies pending recovery                (824)      (1,072)       (1,005)
                                            ---------------------------------
  Net postretirement benefit expense        $  589       $  250       $   207
                                            =================================  

  The rate increases allowed by the 1995 Stipulation and the Mount Holly 
  Stipulation include as an allowable expense the pay-as-you-go portion of 
  postretirement benefits as well as the current service cost, and require 
  that the current service cost be funded.  Elizabethtown funded $318,222 in 
  1995.  These stipulations allow Elizabethtown and Mount Holly to defer the 
  amount accrued in excess of these amounts for consideration in future rate 
  cases.  Generally accepted accounting principles permit this regulatory 
  treatment, provided deferrals are not accumulated for a period of more than 
  five years.  As of December 31, 1995, the amount that has been deferred is 
  $2,900,569.  

  Recovery of Elizabethtown's deferred postretirement costs has been requested 
  in Elizabethtown's recent rate case.  Management believes that Elizabethtown 

                                   -18-
<PAGE>
     and Mount Holly will recover the deferred postretirement costs in future 
     rates.

11. LEGAL MATTERS

   As reported in 1994, a developer asserted in a suit filed in 1991 against 
   Elizabethtown that the Company failed to install facilities necessary to 
   provide water service to a new development in a timely manner.  

   In November 1994, the Company settled this matter by paying the developer 
   $1,750,000.  As part of the settlement, the developer agreed that part of 
   this payment represented a refund of funds deposited under a main extension
   loan agreement for the construction of the facilities.  In addition, the 
   Company applied a portion of the settlement against an insurance reserve.  
   The effect on 1994 earnings was $932,203 or $605,932 net of federal income 
   taxes.  The Company is seeking recovery from its insurance carriers.

   As previously reported, several lawsuits had been filed against 
   Elizabethtown and other parties in connection with a fire that occurred in a
   storage facility in 1989 resulting in damage to property stored at that 
   facility.  This matter has been settled in 1995 resulting in a payment by 
   Elizabethtown of $114,250.  A provision for this estimated liability was 
   previously recorded.

12. RELATED PARTY TRANSACTIONS

   The Company enters into various transactions with E'town and E'town 
   Properties, Inc.  Elizabethtown provides administrative and accounting 
   services to these affiliates with are billed on a monthly basis.  
   Elizabethtown is billed for financial services by E'town.

   The total of all intercompany billings was $469,548, $426,944 and $278,191 
   for 1995, 1994 and 1993, respectively.  In addition, various expenditures 
   are made to vendors which are common to the entities.  Each entity absorbs 
   its proportionate share of these costs.

13  QUARTERLY FINANCIAL DATA (Unaudited)

     A summary of financial data for each quarter of 1995 and 1994 follows:

                                            Income Before       Earnings  
                  Operating    Operating       Preferred        Applicable
     Quarter      Revenues      Income      Stock Dividends   to Common Stock
     ------------------------------------------------------------------------
                (Thousands of Dollars Except Per Share Amounts)
                                                                              
     1995
      1st          $25,174      $ 5,906           $ 3,653        $3,449
      2nd           27,101        6,542             4,377         4,174    
      3rd           30,451        8,085             5,720         5,517    
      4th           25,672        5,754             3,575         3,372    
                  -----------------------------------------------------
      Total       $108,398      $26,287           $17,325       $16,512    
                  =====================================================
     1994     
      1st         $ 24,657      $ 5,579           $ 3,082        $2,832 
      2nd           25,208        5,945             3,484         3,281 
      3rd           27,370        6,976             4,093         3,890 
      4th           24,798        5,684             3,564         3,366
                  -----------------------------------------------------
      Total       $102,033      $24,184           $14,223       $13,369
                  =====================================================<PAGE>

     Water utility revenues are subject to a seasonal fluctuation due to 
     normal increased consumption during the third quarter of each year. 

                                        -19-
<PAGE>