SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                                   FORM 10-Q


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


   For Quarter Ended: March 30, 1997      Commission File Number: 1-7911
--------------------------------------------------------------------------------


                      JAMES RIVER CORPORATION of Virginia
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Virginia                                    54-0848173
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(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                      Identification No.)


 120 Tredegar Street, Richmond, VA                        23219
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(Address of principal executive offices)                (Zip Code)


       Registrant's telephone number, including area code: (804) 644-5411
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                                 Not Applicable
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             (Former name, former address, and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.
                                                                 Yes X       No
Number of shares of $.10 par value common stock outstanding as of May 1, 1997:
                                86,350,913 shares
<PAGE>

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                          QUARTERLY REPORT ON FORM 10-Q
                                 March 30, 1997


                                TABLE OF CONTENTS

                                                                       Page No.
PART I.  FINANCIAL INFORMATION:

         ITEM 1.  Financial Statements:

                  Consolidated Balance Sheets as of
                      March 30, 1997 and December 29, 1996                   3

                  Consolidated Statements of Operations for the
                      quarters ended March 30, 1997 and March 31, 1996       5

                  Consolidated Statements of Cash Flows for the
                      quarters ended March 30, 1997 and March 31, 1996       6

                  Notes to Consolidated Financial Statements                 7

         ITEM 2.  Management's Discussion and Analysis of Financial
                       Condition and Results of Operations                  12


PART II.  OTHER INFORMATION:

         ITEM 1.  Legal Proceedings                                         15

         ITEM 2.  Changes in Securities                                     15

         ITEM 3.  Defaults Upon Senior Securities                           15

         ITEM 4.  Submission of Matters to a Vote of Security Holders       15

         ITEM 5.  Other Information                                         15

         ITEM 6.  Exhibits and Reports on Form 8-K                          16

         SIGNATURES                                                         17





<PAGE>

PART I.    FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                      March 30, 1997 and December 29, 1996
                        (in millions, except share data)

                                                     March             December
                                                      1997                 1996
-------------------------------------------------------------------------------
ASSETS

Current assets:
  Cash and cash equivalents                          $58.1                $33.8
  Accounts receivable                                691.6                717.9
  Inventories                                        662.4                650.4
  Prepaid expenses and other current assets           33.3                 39.1
  Deferred income taxes                               80.0                 78.5
--------------------------------------------------------------------------------

    Total current assets                           1,525.4              1,519.7
--------------------------------------------------------------------------------

Property, plant and equipment                      5,800.8              5,867.2
Accumulated depreciation                          (2,173.9)            (2,115.7)
--------------------------------------------------------------------------------

    Net property, plant and equipment              3,626.9              3,751.5

Investments in affiliates                            159.5                154.6

Other assets                                         368.3                385.7

Goodwill                                             681.7                730.0
--------------------------------------------------------------------------------

    Total assets                                  $6,361.8             $6,541.5
================================================================================


                   The   accompanying   notes  are  an  integral   part  of  the
                    consolidated financial statements.


<PAGE>

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                     CONSOLIDATED BALANCE SHEETS, Continued
                        (in millions, except share data)

                                                     March             December
                                                      1997                 1996
--------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                  $478.4               $507.8
  Accrued liabilities                                563.5                595.6
  Current portion of long-term debt                  116.3                116.9
--------------------------------------------------------------------------------

    Total current liabilities                      1,158.2              1,220.3
--------------------------------------------------------------------------------

Long-term debt                                     1,848.7              1,853.9
Accrued postretirement benefits
  other than pensions                                457.3                458.0
Deferred income taxes                                454.4                443.0
Other long-term liabilities                          202.5                259.9
--------------------------------------------------------------------------------

    Total liabilities                              4,121.1              4,235.1
--------------------------------------------------------------------------------

Preferred stock, $10 par value, 5,000,000
  shares authorized, issuable in series;
  shares outstanding, 3,630,581                      738.4                738.4

Common stock, $.10 par value, 150,000,000
  shares authorized; shares outstanding,
  March 30, 1997 -- 86,347,359 and
  December 29, 1996 -- 86,194,612                      8.6                  8.6

Additional paid-in capital                         1,312.3              1,307.6
Retained earnings                                    181.4                251.8
--------------------------------------------------------------------------------

    Total shareholders' equity                     2,240.7              2,306.4
--------------------------------------------------------------------------------

    Total liabilities and shareholders' equity    $6,361.8             $6,541.5
================================================================================



                   The   accompanying   notes  are  an  integral   part  of  the
                    consolidated financial statements.

<PAGE>

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       For the Quarters (13 Weeks) Ended
                       March 30, 1997 and March 31, 1996
                     (in millions, except per share amounts)

                                                          1997             1996
--------------------------------------------------------------------------------

Net sales                                             $1,381.9         $1,555.4
Cost of goods sold                                     1,019.2          1,182.0
Selling and administrative expenses                      250.2            273.6
Severance and other items                                                  23.4
--------------------------------------------------------------------------------

    Income from operations                               112.5             76.4

Interest expense                                          37.9             45.4
Other income, net                                          7.8              4.0
--------------------------------------------------------------------------------

    Income before income taxes and minority interests     82.4             35.0

Income tax expense                                        34.6             15.4
--------------------------------------------------------------------------------

     Income before minority interests                     47.8             19.6

Minority interests                                         (.3)              .9
--------------------------------------------------------------------------------

    Net income                                           $47.5            $20.5
================================================================================

Preferred dividend requirements                          (14.6)           (14.7)
--------------------------------------------------------------------------------

    Net income applicable to common shares               $32.9             $5.8
================================================================================

Net income per common share
  and common share equivalent                             $.38             $.07
================================================================================

Cash dividends per common share                           $.15             $.15

Weighted average number of common shares
  and common share equivalents                            87.2             85.5
================================================================================


                   The   accompanying   notes  are  an  integral   part  of  the
                    consolidated financial statements.


<PAGE>

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS 
                          For the Quarters (13 Weeks)
                    Ended March 30, 1997 and March 31, 1996
                                  (in millions)
                                                         1997              1996
--------------------------------------------------------------------------------
Cash provided by (used for) operating activities:
  Net income                                            $47.5             $20.5
  Depreciation expense and cost of timber harvested      96.2             101.7
  Amortization of goodwill                                5.2               5.2
  Deferred income tax provision (benefit)                20.0              (2.4)
  Equity in earnings of unconsolidated affiliates        (3.5)              (.8)
  Dividends received from unconsolidated affiliates       1.4               1.5
  Severance and other items                                                23.4
  Change in current assets and liabilities:
    Accounts receivable                                 (14.8)            (31.7)
    Inventories                                         (23.5)              9.7
    Prepaid expenses and other current assets            12.8               4.4
    Accounts payable and accrued liabilities            (20.5)             37.5
  Foreign currency hedge                                (31.5)
  Other, net                                            (18.8)            (20.3)
--------------------------------------------------------------------------------

      Cash provided by operating activities              70.5             148.7
--------------------------------------------------------------------------------
Cash provided by (used for) investing activities:
  Expenditures for property, plant and equipment        (60.4)            (81.7)
  Cash received from sale of assets                       1.6              26.1
  Other, net                                              7.1               1.7
--------------------------------------------------------------------------------

      Cash used for investing activities                (51.7)            (53.9)
--------------------------------------------------------------------------------
Cash provided by (used for) financing activities:
  Additions to long-term debt                            35.2                .9
  Payments of long-term debt                             (5.4)            (92.1)
  Common and preferred stock cash dividends paid        (27.4)            (27.8)
  Other, net                                              3.1                .8
--------------------------------------------------------------------------------

      Cash provided by (used for) financing activities    5.5            (118.2)
--------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents         24.3             (23.4)
Cash and cash equivalents, beginning of period           33.8              66.1
--------------------------------------------------------------------------------

Cash and cash equivalents, end of period                $58.1             $42.7
================================================================================

               The accompanying notes are an integral part of the
                       consolidated financial statements.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Significant Accounting Policies

     Basis of Presentation:

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
financial  statements of James River  Corporation  of Virginia and  Subsidiaries
(the "Company" or "James  River")  contain all  adjustments  (consisting of only
normal   recurring   accruals)   necessary  to  present   fairly  the  Company's
consolidated  financial  position  as of March  30,  1997,  and its  results  of
operations  and cash flows for the quarters (13 weeks) ended March 30, 1997, and
March 31, 1996.  The balance  sheet as of December  29,  1996,  was derived from
audited financial  statements as of that date. The results of operations for the
quarter ended March 30, 1997, are not  necessarily  indicative of the results to
be expected for the full year.

     Derivative Financial Instruments:

     The Company's  debt  structure and  international  operations  give rise to
exposure to market  risks from  changes in interest  rates and foreign  currency
exchange rates. To manage these risks,  derivative financial  instruments may be
utilized  by the  Company  including  interest  rate  swaps and  options  on its
long-term debt and foreign exchange  contracts on certain of its net investments
in foreign operations.  The Company does not hold or issue financial instruments
for trading  purposes.  Occasionally,  the Company  may  terminate a  derivative
financial  instrument.  If an  interest  rate swap or an  option  is  terminated
because  related  debt no longer  exists,  any gain or loss is  recognized  into
income  immediately;  otherwise,  the gain or loss is deferred and  amortized to
interest expense over the remaining periods originally covered by the derivative
contract.  If a foreign  exchange  contract is  terminated,  the gain or loss is
recognized in a separate  component of equity,  net of tax,  consistent with the
accounting treatment of the hedged item.

     Reclassifications:

     Certain  amounts  in  the  prior  year's  financial  statements  have  been
reclassified  to  conform  to  the  current  year's  presentation   including  a
reclassification  of customer freight charges from net sales to cost of sales of
$68.8  million,  $73.4  million,  $71.4 million and $67.8 million for the first,
second,  third and fourth quarters of 1996,  respectively.  Reportable  segments
have been  reconfigured to include  bleached board  operations  (formerly in the
North  American  Consumer  Products  segment)  in the  Packaging  segment and to
include the foodwrap operations (formerly in the Packaging segment) in the North
American Consumer Products segment.

     Adoption of Accounting Pronouncement:

     In February 1997, the Financial Accounting Standards Board issued Statement
No.  128,  "Earnings  per  Share"  ("SFAS  128" or the  "Statement"),  which  is
effective for periods ending after December 15, 1997, including interim periods.
SFAS 128 establishes  standards for computing and presenting  earnings per share
("EPS")  by  replacing  primary  EPS with  the  presentation  of  basic  EPS and
requiring dual  presentation  of basic and diluted EPS on the face of the income
statement.  The  Company  estimates  the  calculations  will not have a material
impact on EPS as currently reported. On a pro forma basis, for the periods ended
March 30, 1997,  and March 31, 1996, EPS as reported would have been $.01 higher
and the same amount as  reported,  respectively,  for basic EPS,  and would have
been the same amount as reported, for both periods for diluted EPS.

<PAGE>

2.   Other Income

     The components of other income were as follows for the quarters ended March
30, 1997, and March 31, 1996 (in millions): 
                                                     March                March
                                                      1997                 1996
--------------------------------------------------------------------------------
Interest and investment income                        $1.6                 $2.3
Equity in earnings of
  unconsolidated affiliates                            3.5                   .8
Gain on sale of assets                                 2.1
Foreign currency exchange gain (loss)                  (.3)                 1.0
Other, net                                              .9                  (.1)
--------------------------------------------------------------------------------

    Total other income                                $7.8                 $4.0
================================================================================


3.   Income Taxes

     The Company's effective income tax rate was 42% for the quarter ended March
30,  1997,  compared to 44% for the first  quarter of 1996.  The decrease in the
effective tax rate from the prior year was primarily due to the relative size of
permanent differences to pretax income.

4.   Inventories

     The  components of  inventories  were as follows as of March 30, 1997,  and
December 29, 1996 (in millions):
                                                     March             December
                                                      1997                 1996
----------------------------------------------- --------------------------------
Raw materials                                       $135.9               $135.7
Finished goods and work in process                   442.6                418.2
Stores and supplies                                  126.2                131.6
--------------------------------------------------------------------------------
                                                     704.7                685.5
Reduction to state certain inventories
  at last-in, first-out cost                         (42.3)               (35.1)
--------------------------------------------------------------------------------

    Total inventories                               $662.4               $650.4
================================================================================

5.   Financial Instruments

     The  Company  held $638  million and $1,286  million in notional  amount of
interest  rate swaps with fair values of $11 million and $15 million as of March
30, 1997 and December 29, 1996, respectively.  During the first quarter of 1997,
the Company effectively unwound $648 million in notional amount of interest rate
swaps. The cost of unwinding the interest rate swaps approximated $8 million and

<PAGE>

will be amortized  to interest  expense over the  remaining  periods  originally
covered by the contracts.  The original  maturity  dates were between  September
1998 and January 1999.

     During the first  quarter of 1997,  the  Company  unwound  $470  million in
notional  amount  of  foreign  exchange  contracts,  along  with  interest  rate
agreements,  at a cost of $31 million, net of tax benefits. The foreign exchange
contracts were designated as hedges of a portion of the Company's net investment
in its  European  Consumer  Products  Business.  The net  termination  cost  was
recorded as a component of equity.  The Company  terminated such contracts prior
to their original expiration in September 1998.

     The fair value of the Company's  debt was less than $100 million above book
value of $2.0 billion as of March 30, 1997 and December 29, 1996,  respectively.
Additionally,  as of March 30, 1997,  the  pay-in-kind  notes  received from the
spin-off of Crown Vantage Inc., originally valued at $85 million, are carried on
the books at a fair value of approximately $79 million.

     The estimated fair values of the Company's financial instruments were based
on quoted market prices of comparable instruments and current market rates as of
March 30, 1997 and December 29, 1996, respectively.

6.   Commitments and Contingent Liabilities

     Environmental Matters:

     Like its  competitors,  James River is subject to extensive  regulation  by
various federal,  state,  provincial,  and local agencies concerning  compliance
with  environmental  control statutes and regulations.  These regulations impose
limitations  on the  discharge  of  materials  into the  environment,  including
effluent and emission limitations,  as well as require the Company to obtain and
operate in  compliance  with the  conditions  of permits and other  governmental
authorizations.  Future  regulations  could  materially  increase the  Company's
capital requirements and certain operating expenses in future years.

     In  December  1993,  the  U.S.  Environmental   Protection  Agency  ("EPA")
published  draft rules which contain  proposed  regulations  affecting  pulp and
paper industry discharges of wastewater and gaseous emissions ("cluster rules").
The final rules are likely to be issued in 1997, with a nominal  compliance date
of 2000.  These rules may  require  significant  changes in the  pulping  and/or
bleaching process  presently used in some U.S. pulp mills,  including several of
James River's mills. The  implementation of the rules could materially  increase
the  Company's  capital  expenditures  between  1998  and  2000.  Based  on  its
evaluation of the rules as they are currently expected to be issued, the Company
believes that capital expenditures of approximately $100 million may be required
to bring James River's  facilities into compliance.  This estimate could change,
depending on several factors, including changes to the proposed regulations, new
developments in control and process technology, and inflation.

     In addition,  James River has been identified as a potentially  responsible
party ("PRP"),  along with others, at various EPA designated Superfund sites and
is involved in remedial investigations and actions under federal and state laws.
It is James River's policy to accrue  remediation costs when it is probable that
such costs will be incurred  and when they can be  reasonably  estimated.  As of
March 30, 1997,  James  River's  accrued  environmental  liabilities,  including
remediation  and landfill  closure  costs,  totaled $21.0  million.  The Company
periodically  reviews  the  status  of all  significant  existing  or  potential
environmental  issues and adjusts its accrual as  necessary.  Estimates of costs
for future remediation are necessarily imprecise due to, among other things, the
identification  of presently  unknown  remediation  sites and the  allocation of
costs among PRP's.  The Company  believes that its share of the costs of cleanup
for its current remediation sites will not have a material adverse impact on its
consolidated financial position, but could have a material effect on

<PAGE>

consolidated  results of  operations  in a given quarter or year. As is the case
with most manufacturing and many other entities,  there can be no assurance that
the Company will not be named as a PRP at additional sites in the future or that
the costs associated with such additional sites would not be material.

     Bondholder Litigation:

     In 1994, James River was sued in Morgan County,  Alabama, in a class action
and in  Bridgeport,  Connecticut,  by certain  former  holders of James  River's
10-3/4% Debentures due October 1, 2018. Most of these Debentures were retired by
means of a tender offer to all holders,  which  commenced on September 18, 1992.
The  remainder  were redeemed on November 2, 1992.  Merrill  Lynch & Co.,  which
acted as  James  River's  dealer  manager  for the  tender,  is also  named as a
defendant in the Alabama case. In general, the complaints allege violations of a
covenant  prohibiting  use of lower cost borrowed funds to redeem the Debentures
before October 1, 1998, and of various disclosure obligations,  and seek damages
in excess of $50 million plus punitive  damages in excess of $500  million.  The
Alabama case has been  certified as a class action and holders of  approximately
one-half  of the  Debentures  elected  not to be part of the class.  Most of the
holders electing out of the class are plaintiffs in the Connecticut  case. James
River  believes  that these claims are without  merit and intends to defend them
vigorously.  In May 1996,  James  River  settled  the claim of an  institutional
holder of approximately 16.54% of the Debentures for $425,000 plus reimbursement
of  attorney's  fees.  Although the ultimate  disposition  of legal  proceedings
cannot  be  predicted  with  certainty,  it is  the  opinion  of  the  Company's
management that the outcome of any claim which is pending or threatened,  either
individually or on a combined basis,  will not have a materially  adverse effect
on the  consolidated  financial  condition  of James River but could  materially
affect consolidated results of operations in a given quarter or year.

7.   Segment Information

     James River's net sales and income from operations by business segment were
as  follows  for the  quarters  ended  March 30,  1997,  and March 31,  1996 (in
millions):

                      Consumer Products
                      -----------------                        Intersegment
                          North                Communications  elimination/
                        America Europe Packaging       Papers  Corporate   Total
--------------------------------------------------------------------------------

March 1997
Net sales                $687.5 $426.6    $196.7       $119.3  $(48.2) $1,381.9
Segment results before
 severance and other items 68.4   45.3      21.2         (3.6)  (18.8)    112.5
Severance and other items
--------------------------------------------------------------------------------
Income from operations     68.4   45.3      21.2         (3.6)  (18.8)    112.5

--------------------------------------------------------------------------------

March 1996
Net sales                $710.9 $464.9    $341.2       $112.2  $(73.8) $1,555.4
Segment results before
 severance and other items 63.6   24.8      29.8          4.2   (22.6)     99.8
Severance and other items (22.7)             (.3)                 (.4)    (23.4)
--------------------------------------------------------------------------------
Income from operations     40.9   24.8      29.5          4.2   (23.0)     76.4

--------------------------------------------------------------------------------

<PAGE>

8.   Subsequent Events:

     As a part of the Company's ongoing program of timberland  divestitures,  on
April 29, 1997,  pursuant to an offering  memorandum  dated  September 12, 1996,
James River  completed  the sale of  approximately  95,000 acres of  timberlands
located in Alabama  and  Mississippi  for cash  proceeds  of $111  million.  The
Company expects to record a second quarter  after-tax gain of approximately  $35
million.

     On May 4, 1997, the Company,  a newly formed wholly owned subsidiary of the
Company and Fort Howard  Corporation  ("Fort Howard")  entered into an Agreement
and Plan of Merger (the "Agreement")  pursuant to which Fort Howard would become
a  subsidiary  of the  Company  in a merger  transaction.  Under the  Agreement,
shareholders  of Fort Howard will receive 1.375 shares of the  Company's  common
stock for each share of Fort Howard common stock.  The transaction is structured
to qualify as a tax-free  reorganization  under  Section  368(a) of the Internal
Revenue Code of 1986, as amended,  and it is anticipated that the merger will be
accounted  for as a pooling of  interests.  The merger,  which is expected to be
completed at the end of the summer 1997, is conditioned  on, among other things,
receiving  regulatory  clearances  in the United States and Europe and obtaining
the requisite approvals of the shareholders of both companies.

<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Results of Operations

Overview

     James River  reported net income of $47.5 million,  or $.38 per share,  for
the first quarter ended March 30, 1997, compared with $20.5 million, or $.07 per
share for the same  quarter of the prior year.  Net sales for the first  quarter
were  $1,382  million,  compared  to  $1,555  million  in the  prior  year.  The
comparability of these results was impacted by nonrecurring charges in the first
quarter of 1996.

Items Affecting Comparability

     Results  for the first  quarter of 1996  included  nonrecurring  charges of
$23.4 million  ($14.3  million net of taxes,  or $.16 per share),  consisting of
domestic  severance  costs of $13.8 million ($8.4 million net of taxes,  or $.10
per share) and net losses on asset  dispositions  of $9.6 million  ($5.9 million
net of taxes, or $.06 per share. The  comparability of results was also affected
by the 1996  divestitures of the Flexible  Packaging and related Inks divisions,
as well as several  small  domestic  Consumer  Products  mills.  

North  American Consumer Products Business

     Operating  results before  severance and other items for the North American
Consumer  Products  Business  increased  by 8%, from $63.6  million in the first
quarter of 1996 to $68.4 million in the current quarter.  First quarter 1997 net
sales  declined to $688 million from $711 million in 1996,  due primarily to the
loss of revenue from divested operations. Excluding divestitures,  revenues from
ongoing operations  increased 3% over the prior year;  reflecting an increase in
retail net sales  partially  offset by a small decline in commercial  net sales.
Strong volumes for tissue-based products over prior year's first quarter in both
retail and commercial  markets and reduced  manufacturing and raw material costs
contributed  to the improved  results.  The volume  improvements  were partially
offset by lower average selling prices lead by competitors in the second quarter
of 1996  for  retail  towel  and  tissue  products  of  approximately  5% to 8%,
respectively.

     In addition to strong sales volumes, the increase in profitability over the
prior  year was  attributable  to  significantly  lower  costs for  certain  raw
materials,  including  wood  and  wastepaper  costs,  coupled  with  solid  cost
reduction performance. Overall increased operating results were partially offset
by a decline in earnings  attributable  to market pulp sales.  This business has
approximately   200,000   tons  of  pulp   capacity  in  excess  of  its  annual
requirements,  which is sold as market pulp. Market pulp volume  improvements of
37% over prior year's levels were partially  offset by average net selling price
declines.

European Consumer Products Business

     Operating profits for the European Consumer Products Business increased 83%
to $45.3  million,  compared to $24.8 million in the first quarter of 1996.  Net
sales declined to $427 million in the current quarter from $465 million in 1996.
While finished  product sales volumes improved more than 3% over the prior year,
revenues were negatively  impacted by a  strengthening  of the U.S. dollar and a
modest  decline in average  pricing.  Improved  finished  product  sales volumes
reflect a continued volume growth in nearly all markets.  The improvement in the
European  Consumer  Products  Business'  operating results was attributable to a
combination  of  stronger  volumes and lower raw  material  costs and other cost
reductions, partially offset by lower average pricing and higher advertising and
related promotional costs. As a net buyer of approximately 450,000 tons per year
of market pulp, the European  Consumer  Products  Business  continues to benefit
from declines in the cost of this raw material. <PAGE>

Packaging Business

     Excluding  the results  attributable  to the  divestitures  of the Flexible
Packaging  and Inks  divisions  in the second  half of 1996,  operating  results
before severance and other items for the Packaging  Business  declined by 18% to
$21.2  million in the current  quarter  from $25.8  million in the prior  year's
first  quarter.  Net  sales,  adjusted  for  the  Flexible  Packaging  and  Inks
transactions,  decreased  11% to $197  million  from $220  million  for the same
periods.  The decline in profitability was principally due to declining finished
product  pricing.  Decreases  in average  prices  from prior  year  levels  were
partially  offset by the favorable trend in wastepaper  costs and  manufacturing
cost reductions over the prior year.

Communications Papers Business

     Operating profits for the Communications Papers Business declined to a loss
of $3.6 million from income of $4.2 million in the first quarter of 1996,  while
net sales  improved 6%, to $119 million from $112 million in the prior year. The
improvement in net sales over the prior year's first quarter is  attributable to
increased  volumes of 43% due primarily to extensive  amounts of  market-related
production  curtailments  which occurred in the first quarter of 1996.  However,
volume  gains  were  more  than  offset  by  selling  price  declines  averaging
approximately $220 per ton.

Other Income and Expense Items

     General  corporate  expenses  totaled $18.8 million in the first quarter of
1997,  compared to $22.6 million  before  severance and other items in the prior
year.  The majority of the decrease was related to reductions in spending on new
integrated  management  information systems, as design and installation projects
are being completed and systems become  operational.  Interest expense decreased
from $45.4  million to $37.9  million  between the first quarter of 1996 and the
first  quarter of 1997.  This  decrease  was  attributable  to the  reduction in
average outstanding debt since the first quarter of 1996. Other income increased
to $7.8 million in the current  quarter  from $4.0 million in 1996,  principally
due to  improved  earnings  of  unconsolidated  affiliates.  The  change  in the
effective  tax  rate for 1997 is  discussed  in Note 3 of Notes to  Consolidated
Financial Statements.

Adoption of Accounting Pronouncement

     In February 1997, the Financial Accounting Standards Board issued Statement
No.  128,  "Earnings  per  Share"  ("SFAS  128" or the  "Statement"),  which  is
effective for periods ending after December 15, 1997, including interim periods.
SFAS 128 establishes  standards for computing and presenting  earnings per share
("EPS")  by  replacing  primary  EPS with  the  presentation  of  basic  EPS and
requiring dual  presentation  of basic and diluted EPS on the face of the income
statement.  The  Company  estimates  the  calculations  will not have a material
impact on EPS as currently reported. On a pro forma basis, for the periods ended
March 30, 1997,  and March 31, 1996, EPS as reported would have been $.01 higher
and the same amount as  reported,  respectively,  for basic EPS,  and would have
been the same amount as reported, for both periods for diluted EPS.

Financial Condition

     Cash  provided by operating  activities  totaled $70.5 million in the first
quarter of 1997,  compared with the $148.7  million  provided in the prior year.
This decrease in cash provided by operating  activities  resulted from a payment
on the unwinding of the Company's foreign currency hedge (See Note 5 of Notes to
Consolidated  Financial  Statements)  and  increases  in  working  capital.  The
Company's current ratio was 1.3 as of March 30, 1997, and 1.2 as of December 29,
1996, while working capital  increased to $367 million from $299 million for the
same periods.  Capital  expenditures  were $60.4 million in the current quarter,
compared to $81.7 million in the prior year's first quarter.
<PAGE>

     Total  indebtedness  decreased  slightly from $1,971 million as of December
29,  1996,  to $1,965  million as of March 30, 1997.  As of March 30, 1997,  the
Company had outstanding  borrowings of approximately  $405 million  supported by
revolving credit facilities,  these borrowings included $223 million outstanding
under such facilities, $111 million of commercial paper and $71 million of money
market  notes.   Total   outstanding  debt  as  of  March  30,  1997,   included
approximately  $1,538  million of fixed rate and $427  million of floating  rate
obligations.  Note 5 of Notes to Consolidated Financial Statements describes the
Company's interest rate swap agreements.

     James  River's  ratio  of  total  debt to  total  capitalization  increased
slightly to 46.6% as of the end of the first  quarter,  from 46% as of the prior
year end,  resulting  from the equity impact of the  strengthening  US dollar on
foreign  currency  translation.  For purposes of this  calculation,  the Company
defines total capitalization as the sum of current and long-term debt, preferred
and common equity and minority  interests.  As of March 30, 1997, under the most
restrictive  provisions  of the  Company's  debt  agreements,  James  River  had
additional  borrowing  capacity of  approximately  $1.5 billion and net worth in
excess of the minimum requirements specified by such agreements of approximately
$330 million.

     As a part of the Company's ongoing program of timberland  divestitures,  on
April 29, 1997,  pursuant to an offering  memorandum  dated  September 12, 1996,
James River  completed  the sale of  approximately  95,000 acres of  timberlands
located in Alabama  and  Mississippi  for cash  proceeds  of $111  million.  The
Company expects to record a second quarter  after-tax gain of approximately  $35
million.

     On May 4, 1997, the Company,  a newly formed wholly owned subsidiary of the
Company and Fort Howard  Corporation  ("Fort Howard")  entered into an Agreement
and Plan of Merger (the "Agreement")  pursuant to which Fort Howard would become
a  subsidiary  of the  Company  in a merger  transaction.  Under the  Agreement,
shareholders  of Fort Howard will receive 1.375 shares of the  Company's  common
stock for each share of Fort Howard common stock.  The transaction is structured
to qualify as a tax-free  reorganization  under  Section  368(a) of the Internal
Revenue Code of 1986, as amended,  and it is anticipated that the merger will be
accounted  for as a pooling of  interests.  The merger,  which is expected to be
completed at the end of the summer 1997, is conditioned  on, among other things,
receiving  regulatory  clearances  in the United States and Europe and obtaining
the requisite approvals of the shareholders of both companies.

     Forward-looking  statements  in this  report are made  pursuant to the safe
harbor provisions of the Private Securities  Litigation Reform Act of 1995. Such
forward-looking  statements  are not  guarantees of future  performance  and are
subject to risks and  uncertainties  that could cause actual results and Company
plans and objectives to differ  materially from those projected.  Such risks and
uncertainties  include, but are not limited to, the ability to affect the merger
of James  River and Fort  Howard;  general  business  and  economic  conditions;
competitive  pricing  pressures  for  the  Company's  products;  changes  in raw
material, energy and other costs; and opportunities that may be presented to and
pursued by the Company.


<PAGE>

PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

         None.

Item 2.  CHANGES IN SECURITIES.

         None.

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     The Annual  Meeting of  Shareholders  was held on April 24, 1997,  at which
time all of  management's  nominees for members of the Board of  Directors  were
elected.  Shareholders of record of the Company's  common stock and its Series P
9% Cumulative  Convertible  Preferred Stock at the close of business on February
20,  1997,  were  entitled  to vote at the  Annual  Meeting.  Votes were cast as
follows:
                                                                 Vote
                                         Voted     Voted  Withheld or     Broker
                                           For   Against    Abstained  Non-Votes
     ---------------------------------------------------------------------------
     Nominees for election of Directors:

       Barbara L. Bowles            86,940,121                798,111
       William T. Burgin            86,886,028                852,204
       Worley H. Clark, Jr.         86,885,019                853,213
       William T. Comfort, Jr.      86,881,499                856,733
       Gary P. Coughlan             86,939,157                799,075
       William V. Daniel            86,836,210                902,022
       Bruce C. Gottwald            70,465,390             17,272,842
       Miles L. Marsh               86,881,191                857,041
       Robert M. O'Neil             86,911,812                826,420
       Richard L. Sharp             86,947,918                790,314
       Anne M. Whittemore           86,241,317              1,496,915

Item 5.  OTHER INFORMATION.

         None.


<PAGE>

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits:

          The exhibits listed below are filed as part of this quarterly  report.
      Each  exhibit  is listed  according  to the number  assigned  to it in the
      Exhibit Table of Item 601 of Regulation S-K.

      Exhibit                                                           Starts
      Number                                                            on Page
--------------------------------------------------------------------------------
      10    James River Corporation of Virginia Supplemental Retirement   E-1
            Plan, for Miles L. Marsh, effective as of May 1, 1997,
            filed herewith.


      11    Computation of Earnings per Share -- filed herewith.           18

      27(a) Financial Data Schedules for the quarter ended March 30, 1997
            (filed electronically only).

      27(b) Financial  Data  Schedules  restated for the quarter ended March 31,
            1996 (filed electronically only).

      (b)   Reports on Form 8-K:

      During the quarter  ended March 30,  1997,  and  subsequent  thereto,  the
      Company filed the following Current Report on Form 8-K:

Date of Report            Event Reported
--------------------------------------------------------------------------------
May 4, 1997               The Company  issued  a  press release  announcing  the
                          signing of an  Agreement and Plan  of Merger with Fort
                          Howard Corporation.


<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  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.

                                        JAMES RIVER CORPORATION of Virginia





                                         By:/s/William A. Paterson
                                            ------------------------------------
                                            William A. Paterson
                                            Senior Vice President and Controller
                                            (Principal Accounting Officer)
Date:  May 9, 1997