SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549

                                                    FORM 10-QSB


[x]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 1996

                                                        or

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission File No.: 0-20277

                                                U.S.A. GROWTH INC.
                        (Exact name of small business issuer in its charter)

                  DELAWARE                                        11-2872782
         (State or jurisdiction of                            (I.R.S. Employer
         incorporation or organization)                     Identification No.)

                              900 West 190th Street, New York, New York 10040
                                     (Address of Principal executive offices)

                                     Issuer's telephone number: (212) 568-7307

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  [ ]

The number of shares of Common Stock, par value $.001 per share,
outstanding as of October 31, 1996, is 10,970,000 shares.


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                                                U.S.A. GROWTH INC.

                                                       INDEX

                                                              Page No.

PART 1 - FINANCIAL INFORMATION:

         Item 1 - Financial Information
         Balance Sheet - October 31, 1996
         (unaudited)                                             3

         Statements of Operations -
           Three Months Ended October 31, 1996                  4
           and 1995 and Cumulative From August 14,
           1987 (Date of Inception) to October 31,
           1996 (unaudited)

         Statements of Cash Flows -                               6
           Year Ended October 31, 1995 and 1996
            and Cumulative August 14, 1987 (Date
            of Inception) to October 31, 1996


         Notes to Financial Statements                              8

         Item 2.           Management's Discussion and Analysis
                           of Financial Condition and Results
                           of operations                            10

PART II.          OTHER INFORMATION                                 12


                                                         2
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                                                 U.S.A GROWTH INC.
                                           (A Development Stage Company)

                                                   BALANCE SHEET
                                                 October 31, 1996
                                                    (Unaudited)


                                                      ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                           $ 394,958
  Income taxes receivable                                 1,000

         Total current assets                         $ 395,958


                                        LIABILITY AND STOCKHOLDERS' EQUITY

CURRENT LIABILITY, accounts payable                    $  2,100

STOCKHOLDERS' EQUITY:
  Common stock, par value $.001 per share,
  authorized 100,000,000 shares, issued
  10,970,000 shares                                          $ 10,970
  Capital in excess of par value                              712,973
  Deficit accumulated during development                     (330,085)
  stage

                  Total stockholders' equity                  393,858
 
                                                             $395,958
 

                                                         3
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                                                U.S.A. GROWTH INC.
                                           (A Development Stage Company)

                                             STATEMENTS OF OPERATIONS
                                                    (Unaudited)


                                                  Cumulative
                                                August 14, 1987
                                              (Date of Inception)
                                                     to
                                                 October 31, 1996  

INTEREST AND DIVIDEND INCOME                       $   196,996
EXPENSES:  Selling, general and
  administrative                                   $   241,904
  Expenses incurred as a result
  of rescinded investment                              270,734
                                                       512,638

INCOME (LOSS) BEFORE INCOME TAXES                  (   315,642)

INCOME TAXES:
  Federal                                                3,739
  State                                                 10,704
                                                        14,443

NET LOSS                                          ($   330,085)

NET LOSS PER SHARE OF COMMON STOCK                                     NIL

WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING DURING
THE PERIOD

                                                         4
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                                                U.S.A. GROWTH INC.
                                           (A Development Stage Company)

                                             STATEMENTS OF OPERATIONS
                                                    (Unaudited)


                                                              Three Months Ended
                                                                  October 31,  
                                                            1996           1995

INTEREST AND DIVIDEND INCOME                             $   4,915      $ 4,490

EXPENSES:  Selling, general and
  administrative                                             1,570        7,697
  Expenses incurred as a result
  of rescinded investment
                                                             1,570        7,697

INCOME (LOSS) BEFORE TAXES                                   3,345      (3,207)

INCOME TAXES:
  Federal
  State                                                       500          613
                                                              500          613

NET INCOME LOSS                                       $     2,845      ($3,820)

NET LOSS PER SHARE OF COMMON STOCK                    $    NIL      $    NIL   

WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING DURING
THE PERIOD                                            $10,970,000  $10,970,000


                                                         5
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                                                U.S.A. GROWTH INC.
                                           (A Development Stage Company)

                                             STATEMENTS OF CASH FLOWS
                            Increase (Decrease) in Cash and Cash Equivalents
 

                                                             Cumulative
                                                           August 14, 1987
                                                         (Date of Inception)
                                                                   to
                                                            October 31, 1996  

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                 ($   330,085)
  Adjustments to reconcile net loss to
  net cash provided by (used in)
  operating activities:
  Changes in assets in liabilities:
  (Increase) decrease in income
  taxes receivable                                        (        779)
  Increase (decrease) in accounts
  payable                                                        1,879
         Total adjustments                                       1,100

NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES:                                    ($   328,985)

NET CASH PROVIDED BY FINANCING
  ACTIVITIES, Net proceeds from
  sales of common stock                                    $   723,943

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                         394,958

CASH AND CASH EQUIVALENTS,
  beginning of period                                                 

CASH AND CASH EQUIVALENTS, end
  of period                                                $   394,958

SUPPLEMENTAL DISCLOSURE OF CASH
  FLOWS INFORMATION, cash period
  for income taxes                                        $     20,396
 

                                                         6
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                                                U.S.A. GROWTH INC.
                                           (A Development Stage Company)

                                             STATEMENTS OF CASH FLOWS
                             Increase (Decrease) in Cash and Cash Equivalents
 

                                                                Year Ended
                                                                 October 31, 
                                                           1996           1995

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                               $   2,845    ($3,820)
  Adjustments to reconcile net loss to
  net cash provided by (used in)
  operating activities:
  Changes in assets in liabilities:
  (Increase) decrease in income
  taxes receivable                                                        113
  Increase (decrease) in accounts
  payable
         Total adjustments

NET CASH USED IN OPERATING
  ACTIVITIES:                                            $    2,845   ($3,707)

NET CASH PROVIDED BY FINANCING
  ACTIVITIES, Net proceeds from
  sales of common stock                                  

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                        2,845    (3,707)

CASH AND CASH EQUIVALENTS,
  beginning of period                                       392,113    389,497

CASH AND CASH EQUIVALENTS, end
  of period                                             $   394,958  $ 385,790

SUPPLEMENTAL DISCLOSURE OF CASH
  FLOWS INFORMATION, cash paid
  for income taxes                                     $       500   $   500
 

                                                         7
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                                                U.S.A. GROWTH INC.
                                           (A Development Stage Company)

                                           NOTES TO FINANCIAL STATEMENTS
                                                    (Unaudited)

NOTE 1 - FINANCIAL STATEMENTS:

         The accompanying unaudited financial statements of U.S.A.
         Growth, Inc. (the "Company"), have been prepared in
         accordance with the instructions to Form 1O-QSB.  In the
         opinion of the Company, the accompanying unaudited financial
         statements contain all adjustments (consisting of only
         normal recurring adjustments) necessary to present fairly
         the financial position as of October 31, 1996, and the
         results of operations and cash flows for the three months
         ended October 31, 1996 and 1995 and from the date of
         inception to October 31, 1996.  While the Company believes
         that the disclosures presented are adequate to make the
         information contained therein not misleading, it is
         suggested that these financial statements be read in
         conjunction with the financial statements and notes thereto
         included in the Company's Form 10-KSB for the year ended
         July 31, 1996.

         The results of operations for the three months ended October
         31, 1996 are not necessarily indicative of the results to be
         expected for the full year.

NOTE 2 - CASH AND CASH EQUIVALENTS:

         Cash and cash equivalents consist of Bank money market funds
         with a yield of 3-5%.

NOTE 3 - INCOME TAXES:

         At October 31, 1996, the Company has available an unused
         capital loss carry forward of $250,000 which may be applied
         against future capital gains expiring in 2004 and a net
         operating loss carry forward of $100,000 which expires in
         2007, resulting in a deferred tax asset of approximately
         $140,000, which was fully reserved at October 31, 1996.

NOTE 4 - RESCINDED INVESTMENT

         On August 19, 1988, the Company issued 3,500,000 restricted
         shares of its common stock, for all of the outstanding
         common stock of Factory Outlets of America, Inc. (FOA) (a
         development stage company), a franchiser of general
         merchandise stores.  An additional 21,000,000 restricted
         shares of the Company's common stock was placed in escrow

                                                        8
<PAGE>

         and was to be issued if FOA attained specified profit
         levels.  In accordance with the agreement, the Company
         contributed $250,000 to FOA's additional paid-in-capital.
         Management of the Company has indicated that FOA continued
         in the development stage through February 1990, at which
         time this agreement was rescinded and 3,080,000 shares of
         restricted stock and all of the restricted escrow shares of
         stock were returned to the Company.  As a result of this
         transaction, the Company incurred total expenses of $20,734
         and the write-off of its investment in FOA of $250,000.

NOTE 5 - CHANGES IN STOCKHOLDERS' EQUITY:

         Accumulated deficit decreased by $2,845 which represents the
         net gain for the three months ended October 31, 1996.

NOTE 6 - STOCKHOLDERS' EQUITY:

         On February 16, 1988, the Company successfully completed its
         public offering.  The Company sold for $.10 per unit
         8,000,000 units (each unit consisting of one share of common
         stock and one Class A redeemable common stock purchase
         warrant).  One Class A warrant entitles the holder to
         purchase one share of common stock and one Class B common
         stock purchase warrant for $.17 per unit through August 16,
         1997.  The Company has reserved the right to redeem the
         unexercised warrants on thirty days written notice for $.001
         per warrant.  The Class B warrant entitles the holder to
         purchase one share of common stock at $.25 per share,
         exercisable through August 16, 1997.

NOTE 7 - CONCENTRATION OF CREDIT RISK:

         The Company maintains its cash balance in a financial
         institution.  The balance is insured by the Federal Deposit
         Insurance Corporation up to $100,000.  At October 31, 1996,
         the entire balance of $22,919 was insured.  The Company also
         has $372,039 in an uninsured money market mutual fund which
         invests in short term U.S. government securities.


                                                         9
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Item 2.           MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS


Plan of Operation

         The Company engages in research, either by itself and/or
through the use of independent consultant(s) (who may have to
agree to receive stock of the Company in payment for their
services in lieu of cash), to determine what type of business can
be established by a new venture which would have potentially high
profits.  The Company's management has no present intention to
retain any independent consultants and management of the Company
has established numerous contacts which, on an ongoing basis, can
lead to inquiries from potential acquisition contacts.  In the
event consultants are retained in the future, it is intended that
their compensation, whether in restricted securities of the
Company or otherwise, will be based on the fair market value of
the Company's stock and the fair market value of such services
calculated on an arms-length basis.

         After an industry is identified, the Company intends to
formulate a business plan, including the amount of capital
required, the type of business, etc. and then to either
authorize, establish or purchase a subsidiary in that field of
business.  At this time, the Company is unable to determine the
industries which may be deemed suitable in which to establish or
acquire a business.  The Company has no arrangements with any
person or entity regarding any establishment or acquisition of
any business.

Results of Operations

         The Company is a development stage company and as of October
31, 1996 had not generated any operating revenue.

         The Company's only source of revenue since inception has
been certificate of deposit interest income, dividends from money
market funds and interest from money market mutual funds with an
approximate yield of 5% per annum. The Company maintains its cash
balance in a financial institution. The balance is insured by the
Federal Deposit Insurance Corporation ('FDIC") up to $100,000.
At October 31, 1996 the Company's cash balance was $22,919 of
which $22,919 is insured by the FDIC.  The remaining funds of
$372,039 is invested in uninsured money market mutual funds which
invests in government securities.  The Company had a net gain of
$2,845 for the three months ended October 31, 1996 as compared to
a net loss of $3,820 for the three months ended October 31, 1995.

         Selling, general and administrative expenses during the

                                                        10
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three months ended October 31, 1996 were $1,570, as compared to
$7,697 for the three months ended October 31, 1996, a decrease of
$6,127.  Selling, general and administrative expenses, primarily
consisted of professional (legal and accounting), transfer agent
and filing fees and expenses related to investigating business
opportunities.

         Management believes that inflation and changing prices will
have minimal effect of operations.


Liquidity and Capital Resources

         The Company has had no material operations and, as of
October 31, 1996, the Company had working capital of $395,958.
The Company had a current ratio of 193 to 1 at October 31, 1996.
Stockholders equity increased from $391,013 for the fiscal year
ended July 31, 1996 to $393,858 for the three months ended
October 31, 1996, which represents a net gain of $2,845 for the
three months.

         The Company has no present outside sources of liquidity.  In
the event the Company determines that its present capital is not
adequate for a future acquisition, the Company may arrange for
outside financing and/or may do a public offering or private
placement of its securities.


                                                        11
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PART II.     OTHER INFORMATION
ITEM 1.      Legal Proceedings

                                                       NONE

Item 6.   Exhibits and Reports on Form 8-K

                  (a) Exhibits.  None.

                  (b)Reports on Form 8-K.  None.

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                                                    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.

Dated: December 11, 1996


                                                              U.S.A. GROWTH INC.


                                                            By:/s/ Robert Scher
                                                            Treasurer and
                                                            Principal Financial
                                                             Officer*






*        Mr. Scher is signing this Report in the dual capacity of
         duly authorized officer and principal financial officer.



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