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, 1998

___ 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_X_  NO___.

               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 April 30, 1998 there were 947,793 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,
                                      ___1998___     ____1997____
_____________ASSETS________________
Cash & cash equivalents              $  244,924       $  236,103
Mortgage loans receivable             3,137,450        1,927,000
Notes receivable                         20,822           66,322
Prepaid and other current assets        135,388           68,307

     Total current assets             3,538,584        2,297,732

Land and development costs            1,089,307        1,041,803
Furniture & equipment, at cost,
  less accumulated depreciation           8,223            8,223
Commission Advances                         -0-            4,600

     Total assets                     4,636,114        3,352,358

__LIABILITIES AND STOCKHOLDERS' EQUITY__
Current liabilities:
 Accounts payable & accrued expenses $  365,527       $  255,970
 Deferred income                         15,853            6,170
 Liability for land development             -0-           66,570 
 Loans payable                          175,972          117,917
 Lot deposits                            86,000           75,000
 Warehouse loans payable              3,075,401        1,886,040
 Mortgage payable                       167,918          183,790
 Preferred stock dividends payable        8,342           16,403

    Total current liabilities         3,895,013        2,607,860

Stockholders' equity:
 Preferred stock subscribed, no par 
 value; 68,750 shares-5% Non-voting
 Series A Cumulative Convertible 
 aggregate liquidation value $687,500   687,500          687,500
 Preferred Stock Dividend             (   7,062)             -
 Common stock, no par value; 
 10,000,000 shares authorized; 
 936,119 shares issued and 
 outstanding                          2,449,325        2,449,325
Additional paid-in capital              231,207          231,207
Accumulated deficit                  (2,626,931)      (2,623,534)
     Total stockholders' equity         741,101          744,498
     Total liabilities and
      stockholders' equity            4,636,114        3,352,358
   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,______
                                      ____1998____   ____1997____

Revenues:
  Mortgage origination fees           $   306,962    $   332,907
  Application fees                         49,505         41,005
  Mortgage interest income                 33,151         45,008
  Land sold                                   -0-        252,500

     Total revenues                       389,618        671,420


Selling, general and
administrative expenses:
  Salaries and benefits                   114,857        124,672
  Commissions and related expenses        143,997        142,612
  Other expenses                          125,819        155,330
  Cost of land sold                           -0-        257,500

     Total selling, general and
     administrative expenses              384,673        680,114


Income/(loss) from operations               4,945       (  8,694)

Other income                                  -0-             75

Income (loss) before provisions
  for income taxes                          4,945       (  8,619)

Provision for income taxes                    -0-            -0-

Dividends on Preferred Stock                8,594          7,062

NEW LOSS AVAILABLE FOR 
  COMMON SHAREHOLDERS                 $   ( 3,649)    $ ( 15,681)

NET LOSS PER SHARE                    $    (0.004)    $   (0.017)


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,____
                                         ____1998___  ____1997___

Cash flows from operating activities:
  Net loss                               $  ( 3,649)  $ ( 15,681)
  Adjustments to reconcile net loss to
  net cash used in operating activities:
   Depreciation and amortization                -0-          163
  Changes in assets & liabilities:
    (Increase)decrease in:
    Notes receivable                         45,500          976 
    Mortgage loans receivable            (1,210,450)  (1,656,444)
    Prepaid & other assets                  (62,481)     (60,068)
    Increase(Decrease) in:
     Accounts payable & accrued expenses     42,987      (37,896)
    Deferred income                           9,683       21,000
    Warehouse loan payable                1,189,361    1,617,269 

 Net cash (used in) provided by
 operating activities                        10,951     (130,681)

Cash flows from investing activities:
    Increase in lot deposits                 11,000          -0-
    (Increase)Decrease in land                      
    & development costs                     (47,504)     257,183 

  Net cash (used in)provided by
  investing activities                      (36,504)     257,183 

Cash flows from financing activities:
    Loans payable                            58,055      (29,676)
    Payments of mortgage payable            (15,872)    (200,049)
    Dividends paid                           (7,809)         -0-

  Net cash (used in)provided by
  financing activities                       34,374     (229,725)

Net increase/(decrease) in cash               8,821     (103,223)

Cash at beginning of period                 236,103      220,733

Cash at end of period                    $  244,924   $  117,510


   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
1997 Annual Report on Form 10-KSB.  The results of the three
months ended March 31, 1998 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, 1998 Compared to the Three Months
Ended March 31, 1997.

     Total revenues for the three months ended March 31, 1998
were $389,618 compared to $671,420 for the three months ended
March 31, 1997, a decrease of $281,802 or approximately 42%.  The
decrease was primarily attributable to an absence of building lot
sales by American Asset Development Corporation, the Company's
wholly owned real estate development subsidiary, and to a lesser
extent a decrease in origination fees of $25,945 and a decrease
of $11,857 in mortgage interest income of Capital Financial Corp.
("Capital"), the Company's mortgage banking subsidiary.  During
the three months ended March 31, 1998 Capital closed 101
residential mortgage loans in the principal amount of $19,980,646
compared to 103 loans closed in the principal amount of
$16,745,313 in the three months ended March 31, 1997.  At March
31, 1998, the Company had approximately 164 residential mortgage
applications in process in the principal amount of $37,320,199
compared to 170 residential mortgage applications in process in
the principal amount of $29,741,297, at March 31, 1997.

     Total selling, general and administrative expenses ("SG&A")
for the three months ended March 31, 1998 were $384,673, a
decrease of $295,441 or approximately 43.5% from $680,114 in the
comparable 1997 period due to the absence of building lot sales,
a decrease in the Company's employee compensation and other
expenses as a result of Capital's planned reduction in the number
of its mortgage loan originators and modification in the
compensation structure for loan originators and certain other
employees.  As a percentage of revenues, SG&A was approximately
98.8% before payment of dividends on Preferred Stock in the
current period compared to 100.3% in the comparable 1997 period.

     As a result of the foregoing, the Company's net income
before Preferred Stock dividends was $4,945 and its net loss
after preferred stock dividends for the three months
ended March 31, 1998 was $3,649 or $0.004 per share, compared to
a net loss of $8,619 and its net loss after preferred stock
dividends of $15,681 or $0.017 per share for the comparable 1997
period.


                               -6-

<PAGE>




LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 1998, the Company had cash and cash 
equivalents of $244,924 compared to $236,103 at December 31,
1997, an increase of $8,821.  The increase is primarily
attributable to cash provided in operating activities.

     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.  At December 31, 1997 the amount was reduced to $2,500,000. 
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 entered into an agreement to
offer its mortgage products on an electronic network system
("Network") of thirty one mortgage bankers which originated
applications through a real estate broker branch office system
located throughout New Jersey.  The applications were forwarded
to Capital for processing and closing.  The Company compensated
the Network of originators with a commission based on closed
loans originated by the Network.  The Company believes it was one
of approximately twelve lenders which offered mortgage products
through this system.  In February 1997, the Network was acquired
by another network which operated in a similar manner to the
original Network.  In July 1997, the Company became a lender on
this new network.  Both Networks operated in a similar manner but
continued as separate entities until July 1997 at which time a
majority of the mortgage bankers from the acquired Network were
terminated.  Since July, the Company continues to receive
business from Network personnel as well as from the former
mortgage Network personnel.  In August 1997, the Company entered
into an agreement with a new network which was formed as an
independent unit by former Network mortgage banking originators. 
In addition, during July 1997 and January 1998, the Company
employed, as originators, two and one mortgage bankers
respectively that were formerly originators with the original
Networks.  There can be no assurance the Company will be
successful in these relationships as it faces intense competition
from the other lenders it competes with for this business, many
of which have greater resources and experience than the Company. 
As of March 31, 1998, the Company has 9 mortgage loans in process
from the combined Networks aggregating approximately $1.75
million out of a total of 164 mortgage loans aggregating
approximately $37.3 million which are currently being processed
by the Company.


                            -7-
<PAGE>




     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 certain 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 funds were used to
refinance the mortgage loan which was on the property, to
complete the balance of required site improvements and provide
an interest reserve.  The loan matured on December 31, 1997, and
was extended by the bank until July 31, 1998, except for the
letter of credit which was extended for an additional one year
term through December 31, 1998.  The mortgage loan is secured by
the personal guarantees of the Company's President and Executive
Vice President.  As of April 30, 1998, the Company is indebted to
the commercial bank for the mortgage loan on its subdivision in
the amount of approximately $169,000.

     In January 1998, the Company executed a contract of sale for
an additional lot in the amount of $110,000 and received $11,000
as a deposit. In April 1998, the Company received an additional
deposit of $70,000 from the purchaser under contract bringing the
total deposit to $81,000.  The Company anticipates transferring
title to this lot during the fourth quarter of 1998.

     As of April 30, 1998, the Company owns 7 unimproved building
lots within the subdivision of the property and has two contracts
of sale pending in the amount of $235,000 of which it has
received total deposits of $156,000.

     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.  


                            -8-

<PAGE>





                    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:  May 15, 1998        By:_s/Richard G. Gagliardi____________
                              Richard G. Gagliardi
                              Chairman, President and Chief
                              Executive Officer (Principal
                              Executive and Financial Officer)

                               -9-
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