U. S. SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C.  20549
                        ________________________

                             FORM 10-QSB

(Mark One)

_X_  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

            For the Quarterly period ended:  March 31, 1997

___ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
    SECURITIES EXCHANGE ACT

          For the transition period from _______ to _______.

                  Commission file number:  0-19154.

               AMERICAN ASSET MANAGEMENT CORPORATION
(Exact name of small business issuer as specified in its charter)

          NEW JERSEY                              22-2902677
(State or other jurisdiction of               (I.R.S. Employer
 incorporation or organization)               Identification No.)

 150 Morristown Road, Suite 108, Bernardsville, New Jersey 07924
              (Address of principal executive offices)

Issuer's telephone number, including area code:  (908) 766-1701


       (Former name, former address and former fiscal year,
                    if changed since last report)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15 (d) of the Exchange Act during the past
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___  NO_X_.

               APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:  As
of December 1, 1997 there were 936,119 shares outstanding of the
issuer's no par value common stock.

Transitional Small Business Disclosure Format (check one): 
YES___   NO_X_


<PAGE>
                 PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

      AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                           (Unaudited)
_________________________________________________________________
                                       March 31,     December 31,
                                      ___1997___     ____1996____
_____________ASSETS________________
Cash & cash equivalents              $  117,510       $  220,733
Mortgage loans receivable             2,993,319        1,336,875
Notes receivable                         27,679           28,655
Prepaid and other current assets        129,912           60,294

     Total current assets             3,268,420        1,646,557

Land and development costs            1,277,420        1,534,603
Furniture & equipment, at cost,
  less accumulated depreciation          14,770           14,933
Other assets                              1,203            1,204
Commission Advances                          -             9,550

     Total assets                     4,561,813        3,206,847

__LIABILITIES AND STOCKHOLDERS' EQUITY__
Current liabilities:
 Accounts payable & accrued expenses $  385,110       $  379,014
 Deferred income                         44,349           23,349
 Liability for land development          90,394          134,386 
 Loans payable                          162,815          192,491
 Lot deposits                            91,000           91,000
 Warehouse loans payable              2,927,397        1,310,128
 Mortgage payable                       229,189          429,238

    Total current liabilities         3,930,254        2,559,606

Stockholders' equity:
 Preferred stock subscribed, no par 
 value; 56,500 shares-5% Non-voting
 Series A Cumulative Convertible 
 aggregate liquidation value $565,000   565,000          565,000
 Preferred Stock Dividend             (   7,062)             -
 Common stock, no par value; 
 10,000,000 shares authorized; 
 936,119 shares issued and 
 outstanding                          2,449,324        2,449,325
Additional paid-in capital              231,207          231,207
Accumulated deficit                  (2,606,910)      (2,598,291)

     Total stockholders' equity         631,559          647,241

     Total liabilities and
     stockholders' equity             4,561,813        3,206,847

   See accompanying Notes to Consolidated Financial Statements.
<PAGE>                             -2-
      AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)
_________________________________________________________________

                                          For the Three Months
                                      ______Ended March 31,______
                                      ____1997____   ____1996____

Revenues:
  Mortgage origination fees           $   332,907    $    49,038
  Application fees                         41,005          5,325
  Mortgage interest income                 45,008         10,932
  Land sold                               252,500             -

     Total revenues                       671,420         65,295


Selling, general and
administrative expenses:
  Salaries and benefits                   124,672         85,052
  Commissions and related expenses        142,612          9,258
  Other expenses                          155,330         56,822
  Cost of land sold                       257,500             -

     Total selling, general and
     administrative expenses              680,114        151,132


Income/(loss) from operations             ( 8,694)      ( 85,837)

Other income                                   75            577

Income before provisions for
state income taxes                        ( 8,619)      ( 85,260)

Provision for state income taxes                -              -

Net income/(loss)                     $   ( 8,619)    $ ( 85,260)

Net income/(loss) per share           $    (0.009)    $    (0.09)


Weighted average number of shares
of common stock outstanding               936,119        936,119

   See accompanying Notes to Consolidated Financial Statements.

<PAGE>                         -3-
     AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited)
_________________________________________________________________
                                           For the Three Months
                                         ____Ended  March 31,____
                                         ____1997___  ____1996___

Cash flows from operating activities:
  Net loss                               $  ( 8,619)  $ ( 85,260)
  Adjustments to reconcile net loss to
  net cash used in operating activities:
   Depreciation and amortization                163        3,459
  Changes in assets & liabilities:
    (Increase)decrease in:
    Notes receivable                            976         (576)
    Mortgage loans receivable            (1,656,444)     658,426
    Fees and interest receivable                  -            - 
    Prepaid & other assets                  (60,068)      (1,726)
    Increase(Decrease) in:
     Accounts payable & accrued expenses    (51,179)    (114,822)
    Commissions payable                     (16,711)       4,346
    Deferred income                          21,000        1,290
    Warehouse line payable                1,617,269     (639,750)

 Net cash (used in) provided by
 operating activities                      (153,612)    (174,613)

Cash flows from investing activities:
    Lot deposits                                  -       66,000
    Increase(decrease) in land                      
    & development costs                    (257,500)     (12,629)
    Purchase of fixed assets                      -       (2,939)

  Net cash (used in)provided by
  investing activities                      257,500       50,432 

Cash flows from financing activities:
    Purchase of common stock                      -            -
    Loans payable                                 -     (120,464)
    Mortgage payable                       (200,049)           -
    Dividends                                (7,062)           -

  Net cash (used in)provided by
  financing activities                     (207,111)    (120,464)

Net increase/(decrease) in cash            (103,223)    (244,645)

Cash at beginning of period                 220,733      274,354

Cash at end of period                    $  117,510   $   29,709

   See accompanying Notes to Consolidated Financial Statements.
<PAGE>                        -4-
      AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Unaudited)
_________________________________________________________________

1.  BACKGROUND AND BASIS OF FINANCIAL STATEMENT PRESENTATION

     The accompanying consolidated financial statements of
American Asset Management Corporation and subsidiaries (the
"Company") are unaudited.  In the opinion of management, all
adjustments and intercompany eliminations necessary for a fair
presentation of the results of operations have been made and were
of a normal recurring nature.  The consolidated financial
statements of the Company include the operations of both
wholly-owned subsidiaries, Capital Financial Corp. and American
Asset Development Corporation.  The Company's operations consist
of specialized and mortgage banking services and real estate
development.  These interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements and related notes thereto contained in the Company's
1996 Annual Report on Form 10-KSB.  The results of the three
months ended March 31, 1997 are not necessarily indicative of the
results of the full year.

2.  REVENUE AND EXPENSE RECOGNITION

     Application fees and commitment fees are recorded when
received and other fee income is recorded when loans close. 
Expenses are recognized as they are incurred.

3.  NET INCOME/(LOSS) PER COMMON SHARE

     Net income/(loss) per common share is based on the weighted
average number of shares of Common Stock outstanding.  No effect
has been given to shares issuable upon exercise of outstanding
warrants as the effect would be antidilutive.

4.  RECLASSIFICATIONS

     Certain prior year amounts have been reclassified to conform
with the current year's presentation.










                              -5-
<PAGE>
     AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES

              MANAGEMENT'S DISCUSSION AND ANALYSIS

                      OR PLAN OF OPERATION
_________________________________________________________________


RESULTS OF OPERATIONS


Three Months Ended March 31, 1997 Compared to the Three Months
Ended March 31, 1996.

     Revenues for the three months ended March 31, 1997 were
$671,420 compared to $65,295 for the three months ended March 31,
1996, an increase of $606,125.  The increase was attributable to
increased application fees, increased origination fees and
mortgage interest income of Capital Financial Corp.  ("Capital"),
the Company's mortgage banking subsidiary and income from the
sale of building lots by American Asset Development Corp.
the Company's wholly owned real estate development company. 
Capital closed 103 residential mortgage loans in the principal
amount of approximately $16,745,313 in the three months ended
March 31, 1997 compared to 13 loans closed in the principal
amount of approximately $2,451,500 in the three months ended
March 31, 1996.  At March 31, 1997, the Company had approximately
170 residential mortgage applications in process in the principal 
amount of approximately $29,741,297 compared to 28 residential
mortgage applications in process in the principal amount of
approximately $4,500,000, at March 31, 1996.

     Total selling, general and administrative expenses ("SG&A")
for the three months ended March 31, 1997 were $680,114, an
increase of $528,982 from the comparable 1996 period due to an
increase in Capital's employee compensation and other expenses as
a result of Capital's increase in the number of its mortgage loan
originators and other employees.  As a percentage of revenues,
SG&A was 100.3% in the current period compared to 231.5% in the
1996 period.

     As a result of the foregoing, the Company's net loss for the
three months ended March 31, 1997 was $8,619 or $0.009 per share,
compared to net loss of $85,260 or $0.09 per share for the
comparable 1996 period.


                               -6-
<PAGE>





LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 1997, the Company had cash and cash 
equivalents of $117,510 compared to $220,733 at December 31,
1996, a decrease of $103,223.  The decrease is primarily
attributable to cash used in operating activities and cash used 
in investing activities, which includes increased land and 
development costs.

     In May 1995, the Company received a $5,000,000 warehouse
line of credit from a mortgage warehouse lender which enables the
Company to borrow funds secured by residential mortgage loans
which will be temporarily accumulated or warehoused and then
sold.  The Company continues to utilize the warehouse line of
credit in the daily operation of it's mortgage banking
subsidiary.

     In October 1996, the Company became a member of an
electronic network system ("Network") of thirty one mortgage
bankers which originate applications through a real estate broker
branch office system located throughout New Jersey.  The Company
has agreed to compensate the Network of originators with a
commission based on closed loans originated by the Network.  The
Company believes it is one of approximately twelve lenders which
offer mortgage products through this system.  There can be no
assurance the Company will be successful in this relationship as
it faces intense competition from the other lenders its competes
with for this business, many of which have greater resources and
experience than the Company.  As of December 5, 1997, the Company
has 14 mortgage loans in process from the Network aggregating
approximately $3.4 million out of a total of 99 mortgage loans
aggregating approximately $21.5 million which are currently being
processed by the Company.

     In December 1996, the Company accepted a commitment issued
by a commercial bank for a construction mortgage financing line
of credit in the amount of $550,000 for use in the Company's real
estate development located in Hunterdon County, New Jersey, known
as Murray Hill Estates.  The loan provides a letter of credit in
the amount of $111,583 which the Company assigned and deposited
in escrow with municipal authorities during January 1997 to
guarantee the township adequate funds to complete the balance of
required site improvements on the property if the Company fails
to complete the required improvements.  As of December 1, 1997,
the Company has completed approximately 90% of all improvements
to the property and plans on completing the balance of the
required improvements during the fourth quarter of 1998, which
the Company estimates will cost approximately $35,000.  The
mortgage loan further provided $430,417 which was used to
refinance the mortgage loan which was on the property, funds to
complete the balance of required site improvements and provides
an interest reserve.  The loan matures on December 31, 1997,

<PAGE>                      -7-
except for the letter of credit which may be extended for
an additional one year term, unless the Company is notified at
least 60 days prior to its scheduled expiration date that the
bank will not allow the extension.  As of December 1, 1997 the
Company had not received notification from the bank that it will
not extend the letter of credit.  The mortgage loan is further
secured by the personal guarantees of the Company's President and
Executive Vice President.  During December 1997, the Company
requested that the term of this mortgage loan be extended one
year.  If the Company is not granted the extension, the loan will
have to be paid in full.  There can be no assurance that the
Company will be successful in obtaining the requested extension.
As of December 1, 1997, the Company is indebted to the commercial
bank for the mortgage loan on its subdivision in the amount of
approximately $157,000.

     As of December 1, 1997, the Company owns 7 unimproved
building lots within the subdivision of the property and has one
contract of sale pending in the amount of $125,000 of which it
has received total deposits of $75,000.

     In January 1997, the Company filed its maps with county
authorities on the subdivision located in Hunterdon County, New
Jersey.  In February, March and June 1997, the Company
transferred title to and received payment in full on 3 unimproved
building lots to 3 non-affiliates of the Company in the amount of
$97,500, $110,000 and $110,000 respectively.  Proceeds from these
sales were used to pay down mortgage debt owed to the commercial
bank and the balance provided working capital to the Company.  On
the first two of three lots sold, the Company arranged
construction financing through Capital and construction
management through an affiliate of the Company.  The homes were
completed during July of 1997.

     In February 1995, the Company entered into a revised 
contract of sale for a lot included in the Property containing an
uninhabitable farmhouse and a fieldstone barn for $148,000, of
which payments of $10,000 were received.  At closing, the Company
received an additional $5,000 and agreed to provide the purchaser
a one-year interest only first mortgage in the principal amount
of $133,000 bearing interest at 9 1/2%.  The Company transferred
title to the purchaser in April 1997.  In May 1997, the Company
sold the mortgage, without recourse, to a non-affiliate of the
Company for $110,000.

     The Company estimates that it will require additional
capital in order to successfully implement its future operational
plans.  As a result, the Company is seeking additional capital
through, among other means, an infusion of noncollateralized
loans and the sale of additional equity in the Company.  However,
there can be no assurance that the Company will be able to obtain
additional capital on terms acceptable to the Company.  

<PAGE>                        -8-


                    PART II OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K
     
       (a)  Exhibit 27 Financial Data Schedule (For SEC use only)
       (b)  No reports on Form 8-K were filed during the quarter
for which this report is filed.


                           SIGNATURES

     In accordance with the requirements of the Exchange Act, the
registrant cause this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                            AMERICAN ASSET MANAGEMENT CORPORATION
                                         (Registrant)


Date:  December 1, 1997    By:_s/Richard G. Gagliardi____________
                              Richard G. Gagliardi
                              Chairman, President and Chief
                              Executive Officer (Principal
                              Executive and Financial Officer)

                               -9-
<PAGE>