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:  September 30, 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)
_________________________________________________________________
                                    September 30,   December 31,
                                      ___1997___     ____1996____
_____________ASSETS________________
Cash & cash equivalents              $  262,786       $  220,733
Mortgage loans receivable               730,471        1,336,875
Notes receivable                         23,822           28,655
Prepaid and other current assets        127,274           60,294

     Total current assets             1,144,353        1,646,557

Land and development costs            1,001,691        1,534,603
Furniture & equipment, at cost,
  less accumulated depreciation          14,443           14,933
Other assets                              1,204            1,204
Commission Advances                          -             9,550

     Total assets                     2,161,691        3,206,847

__LIABILITIES AND STOCKHOLDERS' EQUITY__
Current liabilities:
 Accounts payable & accrued expenses $  238,836       $  379,014
 Deferred income                         14,496           23,349
 Liability for land development          68,599          134,386 
 Loans payable                          121,853          192,491
 Lot deposits                            75,000           91,000
 Warehouse loans payable                701,867        1,310,128
 Mortgage payable                       159,719          429,238

    Total current liabilities         1,380,370        2,559,606

Stockholders' equity:
 Preferred stock subscribed, no par 
 value; 58,750 shares-5% Non-voting
 Series A Cumulative Convertible 
 aggregate liquidation value $587,500   687,500          565,000
 Preferred Stock Dividend             (  22,597)             -
 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                  (2,564,114)      (2,598,291)

     Total stockholders' equity         781,321          647,241

     Total liabilities and
     stockholders' equity             2,161,691        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|For the Nine Months
                         Ended  September 30,|Ended September 30,
                         __1997__   __1996___|__1997__   __1996__

Revenues:
 Mtg. origination fees  $454,271   $139,539  $1,173,147 $ 242,882
 Application fees         27,000     18,705      94,653    40,525
 Mtg. interest income     81,944      7,839     228,694    23,929
 Income from land sold        -          -      505,500        -

    Total revenues       563,215    166,083   2,001,994   307,336

Selling, general 
and administrative
expenses:
 Salaries & benefits     135,951    144,312     384,782   345,546
 Commissions & 
  related expenses       181,328     31,985     494,377    59,391
 Other expenses          208,882     84,604     555,698   218,054
 Cost of land sold         1,076         -      544,212        -

  Total selling, 
  general and 
  administrative
  expenses               527,237    260,901   1,979,069   622,991

Income/(loss) 
 from operations          35,978    (94,818)     22,925 (315,655)

Other income              10,122        606      11,252     1,771

Income before provisions
for St. income taxes      46,100    (94,212)     34,177 (313,884)

Provision for State 
 income taxes                 -          -          -         -

Net income/(loss)      $  46,100  $ (94,212)    34,177  (313,884)

Net income/(loss)      $   0.049  $   (0.10)  $   0.033 $  (0.34) 
 per share

Weighted avg. no.
 of shares of common
 stock outstanding       936,119    936,119     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|For the Six Months
                           9/30/97    9/30/96 | 9/30/97   9/30/96 
CASH FLOWS FROM 
OPERATING ACTIVITIES
  Net loss(income)       $  46,100 $( 94,212)$  34,177 $(313,884)
  Adjustments to 
   reconcile net loss
   to net cash used in 
   operating activities:
   Depreciation 
    & amortization             163     1,263       490     5,719
CHANGES IN ASSETS 
    & LIABILITIES:
 (Increase)decrease in:
  Notes receivable           2,714      (606)    4,833    (1,771)
  Mtg. loans receivable  2,365,643   168,582    606,404 (392,233)
  Fees & Int. receivable                     
   prepaid & other assets   17,367    (1,306)  (57,430)    7,926 
  Increase(Decrease) in:
   Accounts payable, 
    accrued expenses,                         
    commissions payable                     
    & deferred income     (107,400)    3,144  (214,818) (109,957)
  Warehouse line payable(2,292,662)  165,211  (608,261) (384,388)
NET CASH (USED IN)
 PROVIDED BY OPERATING
  ACTIVITIES                31,925   (95,088) (234,605) (404,122)

CASH FLOWS FROM 
 INVESTING ACTIVITIES
  Lot deposits                   -    11,000    (16,000)  73,000
  Increase in land & 
   development costs        (9,906)   (6,107)   532,912  (21,730)
  Purchase of fixed assets       -    (5,193)         -  (10,098)
Net Cash (Used In) Provided
By Investing Activities     (9,906)     (300)   516,912   41,172
CASH FLOWS FROM 
   FINANCING ACTIVITIES 
 Purchase of pref'd stock   50,000        -     122,500       -
 Dividends                  (8,090)       -     (22,597)      - 
 Increase in Mtg. Payable    4,016        -    (269,519)      -
 Loans payable              (5,539)   84,203    (70,638)  97,296
NET CASH (USED IN) PROVIDED
BY FINANCING ACTIVITIES     40,387    84,203   (240,154)  97,296

NET INCR/(DECR) IN CASH     62,406  (11,185)     42,053 (265,654)
CASH @ BEGINNING OF PERIOD 200,380    19,885    220,733  274,354
CASH @ END OF PERIOD     $ 262,786  $  8,700    262,786    8,700

   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 September 30, 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
                      OF PLAN OF OPERATION
_________________________________________________________________

RESULTS OF OPERATIONS

Three Months Ended September 30, 1997 Compared to the Three
Months Ended September 30, 1996.

     Revenues for the three months ended September 30, 1997 and
1996 were $563,215 and $166,083 respectively.  The increase in
the 1997 period of $397,132, was the result of an
increase in mortgage origination fees, an increase in
application fees, and an increase in mortgage interest income
all of which were generated by Capital Financial Corp., the
Company's wholly-owned mortgage banking subsidiary.  The increase
in application fee revenue reflects an increase in the number of
mortgage applications received.  The increase in mortgage
origination fee revenue was due to an increase in the number of
closings during the three month period ended September 30, 1997
as compared to the comparable 1996 period.  The Company is
continuing its efforts to attract experienced loan originators
with established business relationships as sources of referral
for mortgage applications.   During the three month period ended
September 30, 1997, the Company received 121 mortgage loan
applications for processing from borrowers seeking loans
aggregating approximately $24,924,548 as compared to 85
applications in an aggregate amount of approximately $13,468,000
in the comparable 1996 period.  Of the 121 applications
originated during the three months ended September 30, 1996, 19
loans or 15.7% of the total, were refinance applications and 102
loan applications or 84.3% were purchase loans, compared to 85
loans in the comparable 1996 period of which 39 or 46% of the
total were refinances and 46 or 54% of the total were purchase
loans.  The Company closed 127 loans aggregating approximately
$26,401,556 in the three months ended September 30, 1997 compared
to 44 loans closed aggregating approximately $7,412,300 in the
comparable 1996 period.

     Total selling, general and administrative expenses ("SG&A")
for the three months ended September 30, 1997 increased to
$266,336 from $260,901 in the comparable 1996 period. 
The increased SG&A in the 1997 quarter was primarily due to
increased employee compensation costs and increased sales
commissions and related expenses.  As a percentage of revenues,
SG&A was 94% in the quarter ended September 30, 1997 compared to
157% in the comparable 1996 period.  Cost of land sold during the
quarter was $12,076.  The Company did not sell any land during
the comparable 1996 period.

                               -6-
<PAGE>
     As a result of the foregoing, the Company's net income for
the three months ended September 30, 1997 was $46,100 or $0.049
per share, compared to a net loss of $94,212 or $0.10 per share
for the comparable 1996 period.

Nine Months Ended September 30, 1997 Compared to the Nine Months
Ended September 30, 1996.

     Revenues for the nine months ended September 30, 1997 were
$2,001,994 compared to $307,336 for the comparable 1996 period. 
The $1,694,658 increase, was the result of an increase in
mortgage origination fees, an increase in application fees and an
increase in mortgage interest income.  The increase in mortgage
origination fees and application fees was the result of the
Company's continuing efforts to become associated with outside 
sources of mortgage originators to compliment the Company's sales
force.  The increase in mortgage interest income was a result of
higher balances of mortgage loans outstanding.  During the nine
months ended September 30, 1997, he Company received 432 mortgage
loan applications for processing from borrowers seeking loans
aggregating approximately $82,085,431 compared to 178 loan
applications aggregating approximately $28,483,660 received in
the comparable period in 1996.  The Company closed 358 loans
aggregating approximately $64,013,202 in the nine months ended
September 30, 1997, compared to 76 loans closed aggregating
approximately $13,317,075 in the comparable 1996 period. 

     Total SG&A expenses for the nine months ended September 30,
1997 increased to $1,979,069 from $622,991 in the
comparable 1996 period, as a result of increased commissions,
employee compensation and benefits costs.  SG&A expressed as a
percentage of revenues, decreased to 99% from 202.7% in the
comparable 1996 period.  The cost of land sold during the nine
month period was $544,212.  The Company did not sell any land
during the comparable period in 1996.

     As a result of the foregoing, the Company's net income for]
the nine months ended September 30, 1997 was $34,177 or $0.033
per share, compared to a net loss of $313,884 or $0.34 per share
for the comparable 1996 period.  The gain in the 1997 period is
attributable to expenses increasing at a lesser rate than the
increase in revenues as discussed above.  The Company is actively
seeking experienced loan originators to complement its present
sales, management and support staff.








                                -7-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 1997, the Company had cash and cash
equivalents of $262,786 compared to $220,733 at December 31,
1996, an increase of $42,053.  The increase was primarily 
attributable to cash from operating activities.  Cash from
operating activities was the net result of the net gain
for the nine month period ended September 30, 1997 , decreases in
mortgage loans receivable, decrease in accounts payable and
accrued expenses, commissions payable, increase in fees and
interest receivable, decrease in warehouse loan payable, loans
payable to officers/affiliates and deferred income, which were
partially offset by cash provided by decreases in notes
receivable, depreciation and amortization and prepaid and other
current assets.  Cash used in investing activities included
decreased land and development costs and purchase of office
furniture and equipment.

     The increase in mortgage applications and closings during
the period ending September 30, 1997 vs. the period ending
September 30, 1997 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 128 loans with an aggregate principal
amount of approximately $21,957,488 as of December 31, 1996 to 91
loans aggregating approximately $18,802,682 as of June 30, 1997.

     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 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.

                               -8-
<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 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,
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 1997.

                              -9-
<PAGE>
     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.  


                    PART II OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

         During the quarter ended September 30, 1997, 5,000
shares of 5% non-voting Series A Cumulative Convertible Preferred
Stock were subscribed for through a private offering exempt by
Section 4(2) of the Securities Act of 1933.  Each share of
Preferred Stock is convertible into 2 shares of the Company's
common stock.

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)
                               -10-
<PAGE>