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

                             FORM 10-QSB

(Mark One)

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

            For the Quarterly period ended:  June 30, 1996

___ 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 August 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)
_________________________________________________________________

                                       June 30,      December 31,
                                      ___1996___     ____1995____
_____________ASSETS________________
Cash & cash equivalents              $   19,885       $  274,354
Mortgage loans receivable                97,611          658,426
Notes receivable                         35,419           34,254
Prepaid and other current assets         61,512           55,926

     Total current assets               214,427        1,022,960

Land and development costs            1,506,009        1,490,386
Furniture & equipment, at cost,
  less accumulated depreciation          23,833           23,384
Other assets                              2,407           17,225

     Total assets                     1,746,676        2,553,955


__LIABILITIES AND STOCKHOLDERS' EQUITY__
Current liabilities:
 Accounts payable & accrued expenses $  262,632       $  375,733
 Liability for land development         160,417          160,417
 Loans payable                          290,173          277,080
 Lot deposits                           424,000          358,000
 Warehouse loans payable                 90,151          639,750
 Mortgages payable                      228,248          228,248

    Total current liabilities         1,455,621        2,039,228

Stockholders' equity:
 Common stock, no par value; 
 10,000,000 shares authorized; 
 936,119 shares issued and 
 outstanding                          2,434,325        2,434,325
Additional paid-in capital              231,207          231,207
Accumulated deficit                  (2,370,477)      (2,150,805)

     Total stockholders' equity         295,055          514,727

     Total liabilities and
     stockholders' equity             1,746,676        2,553,955

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

              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)
_________________________________________________________________

                         For the Three Months|For the Six Months
                         __Ended  June 30,___|__Ended June 30,___
                         __1996__   __1995___|__1996__   __1995__

Revenues:
 Mtg. origination fees  $ 54,305   $212,223   $ 103,343 $ 261,369
 Application fees         16,495     37,705      21,820    57,030
 Mtg. interest income      5,158      4,229      16,090     4,229

    Total revenues        75,958    254,157     141,253   322,628

Selling, general 
and administrative
expenses:
 Salaries & benefits     116,182    257,964     201,234   502,387
 Commissions & 
  related expenses        18,148     63,473      27,406    74,976
 Other expenses           76,628    170,558     133,450   272,097

  Total selling, 
  general and 
  administrative
  expenses               210,958    491,995     362,090   849,460


Income/(loss) 
 from operations        (135,000)  (237,838)  (220,837) (526,832)

Other income                 588        514       1,165     2,073

Income before provisions
for St. income taxes    (134,412)  (237,324)  (219,672) (524,759)

Provision for State 
 income taxes                 -          -          -         -

Net income/(loss)      $(134,412) $(237,324)  (219,672) (524,759)

Net income/(loss)      $   (0.14) $   (0.26)  $  (0.23) $  (0.57) 
 per share

Weighted avg. no.
 of shares of common
 stock outstanding       936,119    916,104     936,119   916,104

   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|For the Six Months
                           6/30/96    6/30/95 | 6/30/96   6/30/95 
CASH FLOWS FROM 
OPERATING ACTIVITIES
  Net loss               $(134,412)$(237,324)$(219,672)$(524,759)
  Adjustments to 
   reconcile net loss
   to net cash used in 
   operating activities:
   Depreciation 
    & amortization             997     3,850     4,456     9,868
CHANGES IN ASSETS 
    & liabilities:
 Increase(decrease) in:
  Notes receivable           (589)     1,411    (1,165)    2,106
  Mtg. loans receivable    (97,611) (540,515)  560,815  (540,515)
  Fees & Int. receivable                     
   prepaid & other assets   10,958   (26,883)    9,232   (40,176)
  Increase(Decrease) in:
   Accounts payable, 
    accrued expenses,                         
    commissions payable                     
    & deferred income       (3,915)   52,304  (113,101)  130,306
  Warehouse line payable    90,151   524,594  (549,599)  524,594
NET CASH (USED IN)
 PROVIDED BY OPERATING
  ACTIVITIES              (134,421) (222,563) (309,034) (438,576)

CASH FLOWS FROM 
 INVESTING ACTIVITIES
  Lot deposits              (4,000)   50,000    62,000    80,000
  Increase in land & 
   development costs        (2,994)  (49,347)   (15,623) (49,347)
  Purchase of fixed assets  (1,966)       -      (4,905)  (8,300)
Net Cash (Used In) Provided
By Investing Activities     (8,960)      653     41,472   22,353
CASH FLOWS FROM 
   FINANCING ACTIVITIES 
 Purchase of common stock       -         -          -        -
 Increase in Mtg. Payable       -     40,500         -    40,500
 Loans payable             133,557   191,908     13,093  191,908
NET CASH (USED IN) PROVIDED
BY FINANCING ACTIVITIES    133,557   232,408     13,093  232,408

NET INCR/(DECR) IN CASH     (9,824)   10,498   (254,469)(183,815)
CASH @ BEGINNING OF PERIOD  29,709    17,926    274,354  212,239
CASH @ END OF PERIOD     $  19,885  $ 28,424     19,885   28,424

   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
1995 Annual Report on Form 10-KSB.  The results of the three
months ended June 30, 1996 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-
     AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES

              MANAGEMENT'S DISCUSSION AND ANALYSIS
                      OF PLAN OF OPERATION
_________________________________________________________________

RESULTS OF OPERATIONS

Three Months Ended June 30, 1996 Compared to the Three Months
Ended June 30, 1995.

     Revenues for the three months ended June 30, 1996 and 1995 
were $75,958 and $254,157, respectively.  The decrease in the 
1996 period of $178,199, or 70.1%, was the result of a 74.4% 
decrease in mortgage origination fees and a 56.3% decrease in 
application fees, and a 122% increase in mortgage interest 
income, all of which were generated by Capital Financial Corp., 
the Company's wholly-owned mortgage banking subsidiary.  The 
decrease in application fee revenue reflects a significant 
decrease in the number of mortgage applications received.  The 
decrease in mortgage origination fee revenue was due to a 
relatively small number of closings as a result of the reduction 
in the Company's sales force.  In addition, the reduction in the 
number of applications the Company received, the number of loans 
in process began to significantly decrease during the period
ended June 30, 1996.  These decreases resulted in a significant
decrease in loan closings during the period.  Loans typically
close approximately 90 days from the date of application.  The
Company is continuing its efforts to attract experienced loan
originators with established business relationships with
realtors, attorneys and accountants as sources of referrals for
mortgage applications in its service area.  During the three
month period ended June 30, 1996, the Company received 72
mortgage loan applications for processing from borrowers seeking
loans aggregating approximately $11,727,750 as compared to 130
applications in an aggregate amount of approximately $24,568,910
in the comparable 1995 period.  The Company closed 19 loans
aggregating approximately $3,453,275 in the three months ended
June 30, 1996 compared to 55 loans closed aggregating
approximately $10,684,310 in the comparable 1995 period.

     Total selling, general and administrative expenses ("SG&A")
for the three months ended June 30, 1996 decreased $281,037 or
57.1% to $210,958 from $491,995 in the comparable 1995 period. 
The decreased SG&A in the 1996 quarter was primarily due to
decreased employee compensation costs, other expenses and by
lower commission expenses.  As a percentage of revenues, SG&A
was 278% in the current period compared to 194% in the 1995
period.



                               -6-
<PAGE>
     As a result of the foregoing, the Company's net loss for the
three months ended June 30,, 1996 was $134,412 or $0.14 per
share, compared to a net loss of $237,324 or $0.26 per share for
the comparable 1995 period.  The decreased loss in the 1996
period vs. the comparable 1995 period is attributable to
decreased revenues and decreased expenses as discussed above,
including the expense saved resulting from the elimination of
certain sales and administrative personnel and the closing of
two branch offices in September 1995.

Six Months Ended June 30, 1996 Compared to the Six Months Ended
June 30, 1995

     Revenues for the six months ended June 30, 1996 were
$141,253 compared to $322,628 for the comparable 1995 period. 
The $181,375 decrease, or 56.2%, was the result of a 60.5%
decrease in mortgage origination fees, a 61.7% decrease in
application fees and a 380% increase in mortgage interest income. 
The decrease in mortgage origination fees and application fees
was the result of the Company's decision to substantially replace
its sales force during the six month period.  The increase in
mortgage interest income was a result of the Company utilizing
it's warehouse credit line to provide borrowers with construction
to permanent mortgage loans, at interest rates higher than those
charged to the Company by its warehouse credit line lender. 
During the six months ended June 30, 1996, the Company received
93 mortgage loan applications for processing from borrowers
seeking loans aggregating approximately $15,014,950 compared to
202 loan applications aggregating approximately $43,898,275
received in the comparable period in 1995.  The Company closed 32
loans aggregating approximately $5,904,775 in the six months
ended June 30, 1996, compared to 69 loans closed aggregating
approximately $13,132,110 in the comparable 1995 period.

     Total SG&A expenses for the six months ended June 30, 1996
decreased by 57.4% to $362,090 from $849,460 in the comparable
1995 period, primarily as a result of decreased salaries and
benefits of 59.9%, decreased commission and related expenses of
63.5% and other expenses of 51%.  As a result, SG&A, expressed
as a percentage of revenues, decreased to 256% in the 1996
period from 263% in the 1995 period.  The Company is actively
seeking additional experienced loan officers to complement its
present sales, management and support staff.

     As a result of the foregoing, the Company's net loss for the
six months ended June 30, 1996 was $219,672 or $0.23 per share,
compared to a net loss of $524,759, or $0.57 per share for the
comparable 1995 period.  The decreased loss in the 1996 period
is attributable to expenses decreasing at a greater rate than
revenues, partially attributable to the closing of the two
branch offices, as discussed above.

                               -7-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     As of June 30, 1996, the Company had cash and cash
equivalents of $19,885 compared to $274,354 at December 31, 1995 
a decrease of $254,469, or 92.7%.  The decrease was primarily
attributable to cash used in operating activities.  Cash used in
operating activities was the net result of the net loss for the
six month period ended June 30, 1996, decreases in mortgage loans
receivable, decreases in accounts payable and accrued expenses,
commissions payable, warehouse loan payable, increases in loans
payable to others, decreases in fees and interest receivable,
loans payable to officers/affiliates and deferred income, which
were partially offset by cash provided by depreciation and
amortization, increases in notes receivable and prepaid and other
current assets.  Cash used in investing activities included
increased land and development costs and purchase of office
equipment.

     As a result of decreases in revenues and costs associated
with the Company implementing its operational plans, the Company
continues to be adversely affected by a lack of working capital. 
The Company continues to be dependent on short term borrowings in
addition to revenues generated by its mortgage banking
operations.  The Company will continue to incur losses until such
time, if ever, that future revenues are sufficient to offset
operating costs.

    The increase in mortgage applications and closings during the
period ending June 30, 1996 vs. the period ending March 31, 1996
are having a positive effect on the Company's cash flow. 
However, there can be no assurance that the number of future
closings will be sufficient to offset expenses.  Loans in process
have increased from 22 loans with an aggregate principal amount
of approximately $4,567,547 as of December 31, 1995 to 69 loans
aggregating approximately $10,837,897 as of June 30, 1996.

     In October 1993, the Company received final subdivision
approval by municipal authorities on the Company's real estate
development in Hunterdon County, New Jersey, known as Murray Hill
Estates.  As a condition of receiving final approval and prior to
completing the sale of any lots, the Company will be required to
complete certain improvements to the property or post performance
bonds in lieu thereof.  In August 1994, the Company received a
commitment from a commercial bank for two lines of credit
aggregating $700,000, consisting of a $250,000 site improvement
loan and a $450,000 revolving line of credit to finance
construction of a model home and up to two residences in the
subdivision.  The site improvement loan which closed in November
1994, is secured by a first mortgage on the development and
collateralized by personal guarantees of the Company's President
and Executive Vice President.  The interest rate on the site
improvement loan is the bank's prime interest rate plus 1% and is
payable monthly.  The loan expires on November 30, 1996.
<PAGE>                         -8-
     At June 30, 1996, the Company utilized $228,248 of the
$250,000 site improvement loan.  At June 30, 1996 the interest
rate on the loan was 10.5%.

     The Construction line of credit may be used to construct a
model home on the development and up to two residences upon
receipt of contracts of sale.  Construction financing cannot
exceed $150,000 for each residence and no more than three
construction loans can be outstanding at any one time under the
revolving line of credit.  As of June 30, 1996 the company had
not utilized the construction line of credit and has no
intentions of doing so in the future.

    The Company plans on completing the balance of the required
improvements to the property when it has the funds to do so and
then aggressively seek to sell some, if not all of the remaining
unsold lots to pay off debt and restore working capital to the
Company.  There can be no assurance the Company will be
successful in this endeavor.

     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.

     In January 1996, the Company entered into a contract to sell
to a real estate development corporation, 5 building lots which
range in size from 3 to 5 1/2 acres for a total purchase price of
$487,500.  The Company received a $250,000 non-refundable deposit
which entitles the purchaser to receive deeds to two building
lots and the deed to a third lot once the balance of $42,500 is
paid to the Company, when the Company is legally able to transfer
title to the lots.

     The Company continues to seek capital through, among other
means, an infusion of additional noncollateralized loans, the
sale of additional equity in the Company or its subsidiaries and
issuance of debt.  There can be no assurance that the Company
will be able to obtain additional capital on terms acceptable to
the Company.

     In the event the Company's plans change, its assumptions
change or prove to be inaccurate due to unanticipated expenses,
delays, problems or otherwise, or if the Company is unsuccessful
in raising additional working capital or generating sufficient
cash flow through operations, the Company could be required to
curtail its operations as presently conducted.




                               -9-
<PAGE>
                     PART II  OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

     (a)  None

Changes in Registrant's Certifying Accountants

     On April 15, 1996 the registrant engaged R. D. Hunter &
Company, LLP as its principal independent accountant who will
report on the financial statements of the registrant for the year
ending December 31, 1995.


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



                               -10-