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                     [Letterhead of KPMG Peat Marwick LLP]

                                                                    EXHIBIT 15.1



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


The Board of Directors
Payless Cashways, Inc.:


We have reviewed the accompanying  condensed balance sheets of Payless Cashways,
Inc.  as of August  30,  1997 and  August  24,  1996 and the  related  condensed
statements of operations  and cash flows for the thirteen and  thirty-nine  week
periods then ended. These condensed financial  statements are the responsibility
of the Company's management.

We  conducted  our  reviews in  accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole.  Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the  accompanying  condensed  financial  statements for them to be in
conformity with generally accepted accounting principles.

The accompanying condensed financial statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in note 1 to the
condensed  financial   statements,   in  connection  with  a  planned  financial
restructuring,   on  July  21,  1997  the  Company  commenced  a  reorganization
proceeding under Chapter 11. Such circumstances indicate that the Company may be
unable to continue  as a going  concern.  Management's  plans in regard to these
matters are also described in note 1 to the condensed financial statements.  The
condensed financial  statements do not include any adjustments that might result
from the outcome of this uncertainty.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the balance sheet of Payless Cashways,  Inc. as of November 30, 1996
and the related  statements of operations,  shareholders'  equity and cash flows
for the fiscal year then ended (not presented  herein);  and in our report dated
January  13,  1997,  we  expressed  an  unqualified  opinion on those  financial
statements.  As discussed  in note H to the  financial  statements,  the Company
adopted Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," in
fiscal  1996.  In our opinion,  the  information  set forth in the  accompanying
condensed  balance  sheet as of November  30, 1996 is fairly  presented,  in all
material  respects, in  relation to  the balance sheet from  which it  has  been
derived.


/s/ KPMG Peat Marwick LLP

Kansas City, Missouri
September 15, 1997




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                     [Letterhead of KPMG Peat Marwick LLP]

                                                                    EXHIBIT 15.1



Payless Cashways, Inc.
Kansas City, Missouri

Gentlemen:

With respect to the subject registration statements on Form S-8 and Form S-3, we
acknowledge  our awareness of the use therein of our report dated September 15, 
1997 related to our review of interim financial information.

Pursuant to Rule 436(c)  under the  Securities  Act of 1933,  such report is not
considered  a part of a  registration  statement  prepared  or  certified  by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Securities Act.





                                             /s/ KPMG Peat Marwick LLP

                                               
Kansas City, Missouri
September 15, 1997