================================================================================
            UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                  FORM 10-K
(Mark One)
      X        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1997

                                      OR

             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE  REQUIRED]
                 For the transition period from           to

                         Commission file number 1-1177

                             Beneficial Corporation
                (Exact name of registrant as specified in its charter)
          Delaware                                        51-0003820
   (State of incorporation)               (I.R.S. Employer Identification No.)
    301 North Walnut Street,
      Wilmington, Delaware                                   19801
(Address of principal executive offices)                   (Zip Code)

        Registrant's telephone number, including area code: (302)425-2500

SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:
                                                    Name of each exchange
 Title of each class                                 on which registered
                                                 ----------------------------
Common Stock, $1 Par Value                          New York Stock Exchange
5% Cumulative Preferred Stock, $50 Par Value        New York Stock Exchange
$5.50 Dividend Cumulative Convertible Preferred
   Stock, No Par Value $20 Stated  Value
   (convertible into nine shares of Common Stock)   New York Stock Exchange
$4.50 Dividend Cumulative Preferred Stock,
   $100 Par Value                                   New York Stock Exchange
$4.30 Dividend Cumulative Preferred Stock,
   No Par Value, $100 Stated Value                  New York Stock Exchange
Preferred Stock Purchase Rights                     New York Stock Exchange
8% Debentures Maturing at Holder's Option
   Annually on June 15,
   Commencing in 1983 and Due June 15, 2001         New York Stock Exchange
8.40% Debentures Maturing at Holder's Option
   Annually on December 15, Commencing in
   1986 and Due May 15, 2008                        New York Stock Exchange
12 7/8% Debentures, Due August 1, 2013              New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                NONE.

    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
    Indicate by check mark if disclosure of delinquent  filers  pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
    At February  27,  1998,  there were  54,365,830  shares  outstanding  of the
registrant's common stock. The aggregate market value of the voting stock of the
registrant  held by  non-affiliates  of the  registrant was  approximately  $6.5
billion.

                DOCUMENTS INCORPORATED BY REFERENCE

    Part III  incorporates  by  reference  certain  portions  of the  Beneficial
Corporation  Proxy  Statement  for  the  1998  Annual  Meeting  of  Stockholders
scheduled to be held May 21, 1998.
================================================================================


<PAGE>



                                 PART I

Item 1.  BUSINESS.

                                 General

         Beneficial  Corporation  (Company) was organized  under the laws of the
State of Delaware on May 9, 1929,  through the  consolidation of three companies
which had been operated under the same management. The Company traces its origin
to 1914 when its first consumer loan office was opened. The Company is a holding
company,  subsidiaries of which are engaged  principally in the consumer finance
and   credit-related   insurance   businesses.   Operations   conducted  by  the
subsidiaries  consist  principally of a 1,234-office  consumer  finance  network
located in the United States, Canada,  Germany and the United Kingdom;  Personal
Mortgage Corporation,  a direct-response mortgage lending unit, which originates
home equity  loans  chiefly in the  Northeast,  Middle  Atlantic  and West Coast
regions;  Beneficial National Bank USA, a specialized  private-label credit card
bank located in Delaware;  Beneficial Credit Services, which is engaged in sales
finance  activities;  Beneficial  National Bank, a full service  commercial bank
located  in  Delaware,  which  is also  engaged  in  making  income  tax  refund
anticipation loans; The Central National Life Insurance Company of Omaha and its
subsidiary,  First Central  National Life Insurance  Company of New York,  which
underwrite  life and  disability  consumer  credit  insurance;  Wesco  Insurance
Company, which provides credit property insurance;  BFC Insurance (Life) Limited
and BFC  Insurance  Limited,  which are  located in  Ireland,  underwrite  life,
accident and health insurance;  and Harbour Island Inc. and subsidiaries,  which
are  engaged  in  real  estate  development  in  Florida.  The  Company  and its
subsidiaries employed approximately 10,200 people at December 31, 1997.

         The  Company's  Board  of  Directors,  at its  February  1998  meeting,
authorized  management  of the Company to consider a full range of tactical  and
strategic alternatives to enhance shareholder value. These alternatives include,
among other  things,  continuing  to pursue or  modifying  the  strategic  focus
announced  by the  Company  in  October  1997,  the  merger  or  other  business
combination  or  strategic  alliance  with  another  entity,  or the sale of the
Company.  At this point, a comprehensive  effort to identify and pursue the most
meaningful course for the Company and its shareholders is well under way.

         The recent decision by the Board of Directors  reflects the culmination
of a comprehensive  strategic analysis undertaken by management to identify ways
to build on core strengths and enhance  shareholder  value. After a full year of
detailed  analysis,  the Company announced a new strategic focus in October 1997
and a number of initiatives to support these efforts,  including the sale of its
Canadian consumer finance subsidiary, its German consumer banking subsidiary and
the divestiture of certain real estate  holdings in New Jersey and Florida.  The
proceeds  from the sales are  intended  to be used  primarily  on  technological
improvements in the U.S. consumer financial  services business.  On February 10,
1998,  the  Company  entered  into a  definitive  agreement  for the sale of its
Canadian operations and on March 2nd closed the transaction.  The sale generated
a net aftertax gain in excess of $100 million.

         Also, as part of the announced strategic initiatives, the Company plans
major  re-engineering  efforts,  including  new  technology  for the loan office
network in the United  States.  The  Company  believes  that these  enhancements
should  significantly  improve  overall  systems  performance  by providing more
responsive   technology  for  the  loan  office  staff.   Included  in  the  new
capabilities  would be improved loan  origination,  collection and marketing and
solicitation with  significantly-enhanced  credit decisioning for the individual
loan  offices.  Although the Company  believes that its  re-engineering  efforts
should ultimately improve efficiency and productivity, the Company also believes
that the  costs  associated  with  their  implementation  are  likely  to burden
near-term  operating  earnings  before  benefits  begin to be  realized in 1999.
Potential  risks do exist,  however,  for actual  costs of systems  and  process
improvements  and the related  benefits  to be realized to differ  significantly
from expectations.

         For information  concerning  various  factors that affected  operations
during 1997, see  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  under Item 7. For pertinent  geographical  data, see
Note 22 to the Financial Statements.


<PAGE>



                               Operations

Consumer Finance Operations

    Loan Office Network

         During 1997, consumer loan subsidiaries  operated through a loan office
network  in the United  States,  Canada,  Germany  and the  United  Kingdom.  In
addition to making consumer  loans,  the  subsidiaries  purchase loans and sales
finance  contracts  and sell  certain  insurance  products.  The  number of loan
offices has grown noticeably in the last four years. In the United States,  this
trend reflects the Company's  re-entering  smaller markets and inner-city  urban
locations,  with new, scaled-down offices,  staffed by only two or three people.
The  number of offices  in the  network  for the past five years is shown in the
following table:

                                      Number of Offices at December 31
                             --------------------------------------------------
                                   1997      1996      1995     1994     1993
                                   ----      ----      ----     ----     ----
United States................     1,019       972       927      902      886
Canada.......................       109       109       105      102      103
United Kingdom...............        91        90        81       69       60
Germany......................        15        15        17       17       17
                                  -----     -----     -----    -----     -----
    Total....................     1,234     1,186     1,130    1,090     1,066
                                  =====     =====     =====    =====     =====

   In addition,  consumer finance  operations  include two subsidiaries engaged
in private-label  and bank credit card  and  sales  finance  activities  and a
commercial  bank and its  eight  branches  in  Delaware,  including  three
full-service branches open seven days and six nights a week.

    Finance Receivables

   The following table shows the composition of the finance receivables
portfolio at December 31 (in millions):
<TABLE>
<CAPTION>

Receivables Owned:                 1997      1996       1995      1994      1993
                                   ----      ----       ----      ----      ----
<S>                            <C>       <C>        <C>       <C>       <C>
   Real Estate Secured.........$  5,905  $  5,932   $  6,636  $  6,860  $  6,708
   Personal Unsecured..........   3,263     2,983      2,756     2,486     2,275
   Credit Cards................   4,685     4,596      3,084     2,062     1,243
   Sales Finance Contracts.....     994       926        837       810       696
   Commercial..................     183        99        103       105        97
                                -------   -------    -------   -------   -------
         Total Owned........     15,030    14,536     13,416    12,323    11,019
Receivables Sold with Servicing
  Retained (all real
  estate secured)..............   2,913     2,325      1,114       630       192
                                -------   -------    -------   -------   -------
         Total Owned
          and Serviced.......   $17,943   $16,861    $14,530   $12,953   $11,211
                                =======   =======    =======   =======   =======
</TABLE>

   Periodically,  subsidiaries  of the Company  sell home equity loans to trusts
created as real estate  mortgage investment  conduits and retain  servicing.
The Company also retains an economic interest in the residual cash flows of
such  trusts.  The  subsidiaries  sold  $1,608  million of home equity  loans in
1997,  $1,919  million in 1996, $1,104 million in 1995 and $757 million in 1994.
Prior to 1993, subsidiaries sold $868 million.



<PAGE>


   The table below discloses at December 31 international  finance  receivables
by country as translated into U.S. dollars (in millions):
<TABLE>
                      1997          1996          1995         1994         1993
                      ----          ----          ----         ----         ----
<S>                <C>           <C>           <C>          <C>          <C>
Canada.............$   801       $   714       $   684      $   605      $   517
United Kingdom.....  1,943         1,344         1,003          867          666
Germany............    283           389           431          421          402
                     -----         -----         -----        -----        -----
    Total.........  $3,027        $2,447        $2,118       $1,893       $1,585
                    ======        ======        ======       ======       ======
Percentage of
 Receivables Owned.. 20.1%         16.8%         15.8%        15.4%        14.4%
                     =====         =====         =====        =====        =====
</TABLE>

    International Operations

         During  1997,  decisions  were made to divest the  Canadian  and German
subsidiaries.  See Note 3 to  Financial Statements and "Management's
Discussion and Analysis of Financial  Condition and Results of Operations"
under Item 7 for further details regarding these transactions.

         As of December 31, 1997, the Canadian  operation  consisted of 109
offices  located across Canada,  although the provinces of Ontario,  Quebec and
British  Columbia  represented  59% of total  Canadian  receivables.  At
year-end 1997, approximately 39% of Canadian receivables were real estate
secured,  29% were personal unsecured,  24% were private-label credit cards and
8% were sales finance  contracts.  The 15% receivable growth in Canadian dollars
in 1997 was primarily in the private-label credit card and personal unsecured
portfolios.  The Canadian  operations  reported C$18.1 million (US$13.1 million)
in net income for 1997,  compared with C$20.2  million  (US$14.8  million) in
1996 and C$18.5  million (US$13.5  million) in 1995. The decrease in 1997
earnings was the result of increased operating expenses, primarily in marketing.
Net chargeoffs  increased to C$27.5 million (US$19.9  million) in 1997 from
C$26.2 million (US$19.2  million) in 1996,  and  decreased as a percentage  of
average  receivables  outstanding  to 2.66% from 2.84% in 1996.  Contractual
delinquency decreased to 2.36% at year-end 1997 from 2.49% a year earlier.

         The United Kingdom operation offers consumer loans,  sales finance
contracts,  credit card and deposit services through  91 offices  in the
United  Kingdom.  The U.K.  operation  is a leading  issuer of Visa cards to
United  Kingdom affinity  groups and also has  established  a presence in the
co-branded  credit card market.  Its  centralized  secured lending  operation
remains very  profitable  and recorded a record growth year as activity in the
housing  market picked up. The  presence  in this  market  was  doubled  toward
the end of the year by the  acquisition  of  Endeavour  Personal Finance Ltd.,
a provider of secured  personal  loans,  from Lloyds TSB Group PLC.  This
acquisition  makes  Beneficial a leading  provider  of  finance in the  indirect
secured  lending  market in the  United  Kingdom  and  gives  increased
opportunity  for  economies of scale in this segment of Beneficial's operations.
After this  acquisition,  centralized secured lending  represents
(pound)336 million,  or 29%, of United Kingdom  receivables.  Total  receivables
increased by (pound)227 million,  or 29%, on an  internal  basis  during  1997,
and by (pound)392  million,  or 50%,  with the  Endeavour  acquisition included.
Total  receivables  at year-end were in excess of (pound)1 billion , with a 30%
growth in the number of accounts and the  number of  customers  exceeding  half
a million.  Over the past four  years,  receivables  have  increased  at a 27%
compound growth rate. Profits were (pound)8.9 million (US$14.5 million) in 1997,
up from (pound)7.1 million (US$11.0 million) in 1996 and down from (pound)10.4
million  (US$16.4  million)  in 1995.  Examining  profitability  measures  as a
percentage  of average  receivables,  the 1.10% reduction  interest margin was
more than offset by a reduction in the level of operating expenses of .89% and a
reduction of .28% in the level of bad costs.  In addition,  all United  Kingdom
credit  insurance is issued by  Beneficial's  Irish  insurance  subsidiaries,
which recorded 1997 aftertax  profits of (pound)8.8 million versus (pound)3.4
million in 1996. Net chargeoffs  increased to (pound)15.5 million  (US$25.4
million) in 1997 from (pound)13.9 million  (US$22.1 million) in 1996; likewise,
as a percentage of average receivables  outstanding, net chargeoffs decreased to
1.73% from 1.97% in 1996.  Contractual delinquency increased to 4.60% at
year-end 1997 from 3.75% at the end of 1996.


<PAGE>



         The German  consumer  banking  subsidiary's  name was changed  from
BFK Bank AG to  Beneficial  Bank AG (BBAG or Bank) on October 1, 1996. The Bank
offers  consumer loans and accepts  deposits  through 15 offices in Germany.  In
1997, Germany  reported a pretax loss of $6.7 million  versus  virtual breakeven
results in 1996 and a loss of $26 million in 1995. The loss in 1995 was the
result of charges relating to the Fundus Grundstuecks GmbH (Fundus)  portfolios.
See "Management's  Discussion and Analysis of Financial Condition and Results of
Operations," under Item 7 and Note 3 to the Financial  Statements for further
details.  As mentioned  above, the Company  anticipates the sale of Germany to
occur in the  short-term.  A loss of $27.8  million was  recognized  in 1997
after  consideration  of a $31.0 million tax benefit, primarily  generated by
the expected  utilization  of capital  losses.  However,  if the business is
liquidated by other means, additional losses may be possible.

    Geographic Distribution

         Finance  receivables in each of the ten jurisdictions  (U.S. and
international)  with the highest percentages of total owned receivables were as
follows:
<TABLE>
<CAPTION>

Jurisdiction                                                            Percent
------------                                                            -------
<S>                                                                       <C>
California.......................................................         16.4%
United Kingdom...................................................         12.9
New York.........................................................          6.4
Canada...........................................................          5.3
Pennsylvania.....................................................          4.6
Texas............................................................          4.6
Ohio.............................................................          3.6
Florida..........................................................          3.5
New Jersey.......................................................          3.4
Illinois.........................................................          3.0
</TABLE>

    Portfolio Distribution

         The  following  table  shows the  distribution  by size of real  estate
secured and personal unsecured loans made during the respective years:
<TABLE>
<CAPTION>

                      Principal Amount of Loans Made in Each Size Class
                            as a Percent of Total Principal Amount
            -------------------------------------------------------------------
                                  Years Ended December 31
            -------------------------------------------------------------------
                        1997        1996          1995         1994        1993
                        ----        ----          ----         ----        ----
<S>       <C>           <C>         <C>           <C>          <C>         <C>
Under     $ 5,000....   41.0%       40.9%         42.0%        38.8%       35.2%
5,001   -  50,000....   29.3        28.8          28.9         26.7        26.0
50,001  - 100,000....   14.0        15.2          14.4         16.9        18.7
Over      100,000....   15.7        15.1          14.7         17.6        20.1

</TABLE>


<PAGE>


    Credit Quality Measures

         Certain data  regarding  loss  experience of finance  receivables on an
owned basis are as follows:

--------------------------------------------------------------------------------
(in millions, except percentages)
<TABLE>
<CAPTION>

                               Net                      Allowance      Allowance
              Gross     Chargeoffs              Net    for Credit     for Credit
             Amount         (after       Chargeoffs     Losses at      Losses to
     of Receivables     offsetting       to Average        End of            Net
Year    Charged Off     recoveries)     Receivables          Year    Receivables
--------------------------------------------------------------------------------
<S>          <C>            <C>              <C>            <C>            <C>
1997         $468.2         $412.2           $559.9         2.85%          3.73%
1996          363.3          316.9            498.2         2.26           3.43
1995          247.2          209.4            406.1         1.64           3.03
1994          183.3          148.7            331.6         1.28           2.69
1993          176.4          149.1            279.0         1.42           2.53
--------------------------------------------------------------------------------
</TABLE>
Note:   1995  and  1994  do  not  include  $15.0  million  and  $38.0   million,
respectively,  in chargeoffs related to German liquidating loan portfolio, which
would increase net chargeoffs to average gross  receivables to 1.76% in 1995 and
1.61% in 1994.

         The allowance for credit losses at year-end 1997 covered net chargeoffs
1.36  times,  compared  with  1.57  times a year  earlier.  In  addition  to the
allowance for credit losses, the balance in dealer reserves at December 31, 1997
and 1996, was $8.1 million and $8.6 million,  respectively. The following tables
summarize  delinquency  and  chargeoff  percentages  by  product.   Amounts  are
expressed as a percentage of owned receivables except where noted.
<TABLE>
<CAPTION>

                                        Delinquency By Major Loan Product
                                ------------------------------------------------
                                   1997      1996      1995      1994      1993
                                   ----      ----      ----      ----      ----
<S>                                <C>       <C>       <C>       <C>       <C>
Real Estate Secured Loans*.......  3.03%     2.13%     2.17%     1.88%     2.13%
Personal Unsecured Loans.........  5.86      5.81      5.28      4.71      4.41
Credit Cards.....................  4.47      3.23      2.76      1.78      2.25
Sales Finance Contracts........... 4.17      3.62      2.89      2.12      2.06
Overall........................... 4.24%     3.38%     2.98%     2.46%     2.67%
*The percentage is presented on a managed receivable basis.
</TABLE>

<TABLE>
<CAPTION>
                                        Net Chargeoffs By Major Loan Product
                            ---------------------------------------------------
                                  1997       1996      1995      1994      1993
                                  ----       ----      ----      ----      ----
<S>                               <C>        <C>       <C>       <C>       <C>
Real Estate Secured Loans*..      0.64%      0.65%     0.81%     0.76%     0.91%
Personal Unsecured Loans....      4.99       4.55      3.79      3.03      3.36
Credit Cards................      4.84       3.81      2.73      2.59      4.15
Sales Finance Contracts.....      2.88       2.53      2.10      1.67      1.76
Note:  1995 and 1994  exclude the effect of the $15.0  million and $38.0 million
German  liquidating  loan  portfolio charges, respectively.
*Includes losses on disposition of foreclosed property, including holding costs.
The percentage is presented on a managed receivables basis.
</TABLE>

         Chargeoffs and  delinquencies  are generally  higher during  periods of
adverse  economic  conditions,  such as rising  unemployment,  falling housing
values,  and increased  inflationary  pressures, which affect the ability of the
borrower  to repay.  It is the  policy of the  subsidiaries  generally  not to
renew  delinquent  accounts.  Receivables considered to be uncollectible or to
require  disproportionate  collection costs are charged to the allowance for
credit losses,  but collection  efforts are generally  continued.  For further
discussion on chargeoffs and  delinquency,  see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" under Item 7.



<PAGE>


    Lending Policies

         Loans on both a secured and  unsecured  basis are made after a thorough
credit investigation and a favorable evaluation as to the borrower's willingness
and ability to repay.  Real estate secured loans are either  closed-end or
revolving,  and rates are either  variable or fixed.  Of the portfolio of loans
owned at the end of 1997,  approximately 59% of real estate secured loans were
fixed-rate and 41% were variable-rate.  Real estate secured loans are subject to
carefully monitored underwriting of both the borrower's ability to repay and the
independent  professionally  appraised market  value of the  property. The loans
are  well-documented  consumer  loans  based on the  creditworthiness  of the
borrower,  with the collateral of the real estate providing additional security.
U.S.  consumer finance  subsidiaries will  generally lend to a maximum of only
75%  (including  the existing  first  mortgage) of the appraised  value of the
real estate as determined by independent  appraisers on second  mortgage  loans.
In the case of a first  mortgage,  the subsidiaries  will  generally lend to
only 80%. Beginning in 1998, U.S. loan offices will be permitted to go to 90% on
both first and second  mortgages,  although  subject to stringent  underwriting
requirements  and  improved  risk-based pricing   guidelines.   In  addition,
a  rigorous  discipline  of  credit  approval  is  enforced  regarding  borrower
debt-to-income ratios and  overall consumer  credit  quality.  Most real  estate
loans must be  approved  by regional management,  as well as by the  originating
loan office  manager.  Loans above $250,000  generally  require  additional
approval by senior operating  management at headquarters. Independent appraisers
are evaluated by regional management, as well as by the loan office manager.

         Closed-end  loans and  revolving  loans made under  consumer  finance
acts  generally  are not secured by real estate.  Closed-end  loans generally do
not exceed a 60-month term,  and the interest rate may be limited  according to
the size of the loan.  Revolving loans are written with fixed rates.  Generally,
loans under the consumer  finance acts are made at the maximum rates  allowable.
Experience  indicates  that a borrower who qualifies  for  additional  credit
often  obtains a new loan in an amount  larger than his existing  balance.  A
portion of the proceeds of the new loan is applied to extinguish the existing
balance.

    Sales Finance and Credit Card Activities

         Sales finance activities  conducted by subsidiaries  featuring the name
"Beneficial Credit Services"  represent an important  source of new loan
customers  for the consumer  finance  subsidiaries.  In 1997,  roughly 50% of
new loan customers for other  consumer  finance  products  originated  as sales
finance  customers.  Beneficial  Credit  Services programs are marketed through
the loan office network to smaller local and regional merchants.

         Beneficial  National  Bank  USA  (BNB  USA)  is a  specialized,
private-label  credit  card  bank  located  in Wilmington,  Delaware.  BNB USA
offers  customized  private-label  and  co-branded  revolving  charge  programs
to large regional and national retailers,  offering their retail customers open
lines of credit.  Additionally,  BNB USA provides marketing and cardholder
services  designed to meet each retailer's  needs.  Targeted  retailers  include
electronics, furniture  and apparel  retailers,  as well as home  centers,
warehouse  clubs and general  merchandisers.  Outstanding receivables  totaled
$3,750  million at year-end 1997,  down slightly from $3,870 million at the end
of 1996 and up from $2,545  million  at the end of 1995.  During  1997,
diversification  of the BNB USA  portfolio  increased  as the three
largest  merchants - Best Buy Company,  Inc., Rhodes Furniture (a division of
Heilig Meyers) and CompUSA - comprised 69% of the portfolio at year-end  versus
75% a year earlier. The two newest  programs, Costco Inc. and Kmart Corporation,
grew  substantially  to  $609  million,  or 16% of  total  outstandings,  from
$360  million,  or 9% of  year-end  1996 outstandings.

         The  composition  of the portfolio has also changed with respect to the
portion of standard  revolving  versus deferred  financing  receivables.  At the
end of 1996,  56% of  outstanding  receivables  were in a  deferred  financing
plan.  One year later,  this figure has  declined to 41%. This  provides BNB USA
with a higher revolving finance base with higher yields, and also reduces
BNB USA's exposure to interest-rate risk should interest rates suddenly
increase.


<PAGE>


After  having a  breakeven  year in 1996,  which was  dampened by $65 million of
up-front loan loss provisioning on the strong  receivables growth experienced in
1996 and $10  million of  start-up  costs  relating  to  programs  for Kmart and
PriceCostco,   BNB  USA  enjoyed  a  dramatic  recovery  in  earnings  in  1997.
Accordingly,  BNB USA  earnings  aftertax  rose to $46  million in 1997 versus a
breakeven  in 1996 and $21.1  million in 1995.  Reflecting  the  leveling off of
receivable  growth,  coupled with the maturation of the portfolio and increasing
consumer  bankruptcy,  BNB USA  experienced  increases in loan  delinquency  and
chargeoffs.  Net  chargeoffs  increased  to $193.2  million in 1997 from  $118.8
million  in 1996.  As a  percentage  of  average  receivables  outstanding,  net
chargeoffs  rose to 5.34% in 1997  from  4.00% in 1996.  Similarly,  contractual
delinquency increased to 4.87% at year-end 1997 from 3.46% at December 31, 1996.

    Personal Mortgage Corporation

         Personal Mortgage  Corporation (PMC), which began operations in
July 1991,  provides consumers with fast action on home equity loan
applications, all by telephone,  with an initial answer usually within 24 hours.
The menu of real estate  products  offered by PMC is wider than typically
offered in a loan office and therefore can meet the needs of a broader
demographic  base.  Although PMC expanded  operations  into four West Coast
markets in 1996,  the decision was made to  withdraw  from these very  high-cost
markets,  effective  October 1, 1997.  With  passage of a  constitutional
amendment in Texas making  available  home equity loans for the first time, PMC
began taking  applications  in the state on November 6, 1997. In 1997, PMC
funded 4,320 loans for more than $200 million,  a 7%  improvement  over 1996 in
number of loans.  Approximately  89% of loans funded were retained by Beneficial
subsidiaries  in 1997.  The  remainder  were sold to other  originators  who
provide  products to service niches outside of Beneficial's traditional customer
base. PMC made an aftertax  profit  contribution  of $0.6 million for 1997,
down from $1.5 million in 1996 and $1.7 million in 1995.

    Commercial Banking

         Beneficial  National Bank (BNB or Bank), based in Wilmington, Delaware,
is the Company's  commercial banking subsidiary.  Through its eight  branches,
including  three  full-service,  in  Delaware,  BNB  provides a full range of
commercial  and  consumer  banking  services to small- and  medium-sized
businesses  and to  consumers  in Delaware and surrounding  markets.  Also, BNB,
in conjunction  with affiliated  companies,  originates and services a portion
of the tax refund  anticipation  loans (RALs) issued  through H&R Block and
certain of its  franchisees.  In December 1996, BNB introduced a nationwide
on-line loan program  that allows  consumers to apply for  unsecured  loans
through a personal computer and receive a decision in two minutes or less.  In
addition,  the Bank  provides  significant  corporate  cash management  and
treasury  services  to the  Company  and its  operating  subsidiaries.  All
disbursements  through the consumer  finance  subsidiaries' loan office network,
as well as all checks written by customers on revolving  credit lines originated
through the loan office network, are drawn on BNB.

         At December 31, 1997, total loans  outstanding  were $189 million,  up
from $176 million in 1996 but down from $227  million in 1995.  The Bank's loan
portfolio is composed of 47%  commercial  and  industrial  (C&I) loans and 53%
consumer  loans and credit card  receivables.  A large portion of the C&I loans
are  commercial  mortgage loans or have real estate collateral as additional
security for cash  flow-oriented  business loans. Total deposits at December 31,
1997 were $268 million, down from $319 million at December 31, 1996 and $321
million at December 31, 1995.

         The Bank's earnings  include  processing  fees for  originating and
servicing the RAL program.  These earnings have also been included with the
earnings  reported in the tax refund  anticipation  loan program section that
follows, so that all earnings related to RAL can be set forth separately.

         BNB's net income excluding RAL processing fees was $6.3 million in
1997,  down from $6.8 million in 1996 and $7.0 million in 1995. The decrease in
earnings in 1997 resulted  mainly from lower interest  income compared with 1996
and 1995, respectively.



<PAGE>


    Refund Anticipation Loan Program

         Through  BNB,  RALs are made to consumers  entitled to a tax refund who
electronically  file their  returns  with the  Internal  Revenue  Service  (IRS)
through either H&R Block's (Block)  electronic filing system or systems of other
independent  electronic  filers  approved  by  the  IRS.  After  the  return  is
processed,  refund proceeds are directly transferred from the IRS via electronic
funds  transfer  to a unique  customer  loan/deposit  account  at BNB,  with the
proceeds applied to repay the outstanding  loan. In early February 1995, the IRS
began delaying the payment of the earned income tax credit (EITC) portion of the
tax refund payable to BNB on returns filed in 1995, and  subsequently  confirmed
that,  when  finally  released,  the held earned  income  portion  would be sent
directly to the taxpayer,  rather than to BNB as directed by the taxpayer.  This
IRS action created serious collection  problems for BNB as related credit losses
totaled $96 million.  Of the $314 million in RALs  affected by the IRS's action,
$248 million,  or 79%, was recovered by year-end 1996. For discussion on the BNB
agreement  with H&R Block Tax Services,  Inc.,  see  "Management  Discussion and
Analysis of Financial Condition and Results of Operations" under Item 7.

         The RAL program ended 1997 with aftertax  income of $43.7 million, down
from aftertax income of $69.8 million in 1996 and up from an  aftertax  loss of
$37.9  million in 1995.  As  mentioned  in the  Commercial  Banking  section,
income  includes BNB  processing  fees.  Gross  revenues in 1997 grew to $184.8
million from $141.3 million in 1996 and $152.6  million in 1995.  The number of
RALs made in 1997 grew to 2,960,000  from  2,650,000  in 1996 and  2,717,000 in
1995.  The average  loan amount was $1,392 in 1997 up from $853 in 1996 and
$1,162 in 1995.  The  increase in RALs made and the average  loan amount is the
result of the Company's decision to resume lending on the portion of tax refunds
attributable to the EITC in 1997, primarily to prior customers in good standing.

Insurance Operations

         Operations of the Beneficial  Insurance  Group (BIG) consist  primarily
of The Central  National Life Insurance Company of Omaha (CNL) and its
subsidiary, First Central  National Life  Insurance  Company of New York (FCNL),
which underwrite life and disability consumer credit insurance.  In mid-1993,
BIG acquired Wesco Insurance Company (Wesco), a property/casualty  insurance
company  licensed  in 41  jurisdictions.  The  addition  of Wesco  allowed BIG
to directly underwrite the credit property  coverage for the Beneficial consumer
finance  network.  In addition,  insurance agency relationships  are  maintained
with  several  outside  insurance  companies  that  offer  selected  non-credit
related products.  These products are marketed chiefly through the domestic
Beneficial loan office network.  Agency  operations earn a commission, while the
insurance  risk of loss rests with the insurance  carrier.  In October 1995, BFC
Insurance Limited,  located in Ireland,  began to provide  credit-related  life,
accident and health insurance products on United Kingdom originations.

         CNL and its  subsidiary,  FCNL,  rank among the  industry  leaders in
the highly  specialized  consumer  credit insurance  marketplace,  offering both
life and  disability  coverages.  The credit  products  are  generally  marketed
through  the U.S.  consumer  finance  subsidiary  network.  During  1997,  A.M.
Best  again  affirmed  its rating of A+ (Superior) for CNL.

         Credit life  insurance  policies  typically  cover the life of the
borrower and provide for the full payment of the outstanding  balance in the
event of the insured's  death.  Credit accident and health  insurance  policies
provide for the payments of the installments as they become due on the insured's
obligation  during a period of unemployment or disability due to illness or
injury.  Credit property  insurance is written to protect the property  pledged
as security for the  obligation.  Purchases  of credit  life and credit accident
and  health are  entirely  voluntary  and at the borrower's  request.
Additionally,  purchases of property  insurance  are also at the  borrower's
request,  except for property damage coverage for property pledged as collateral
if the borrower does not provide  evidence of coverage with another insurance
carrier.


<PAGE>


         In late 1995,  the decision was made to exit the annuity  business
based on the  conclusion  that this product line could not offer  acceptable
profitability  or a strategic fit with the core  business.  Further,  recent
research indicated  that the  Beneficial  core  consumer is likely to remain a
borrower  well into their mature  years.  In March 1996, CNL  effectively
disposed of the $957 million annuity  portfolio to SunAmerica  Life Insurance
Company through a co-insurance  agreement.  As a result of the disposition,
there was an $8.4 million gain after consideration of related taxes and a
substantial  upstream  dividend of $124 million was paid to  Beneficial
Corporation  at year-end  1996. In June 1997, the  co-insurance  agreement with
Great Southern Life for the ordinary life block  disposition  was completed
and CNL disposed of approximately  $40 million in assets (cash and policy loans)
resulting in an aftertax gain of $4.7 million.  At year-end 1997, the Insurance
Group paid upstream dividends to Beneficial Corporation of $57.5 million.

         BIG's  total net  premiums  written in the U.S.,  largely by CNL,  were
$164.5  million in 1997, down 3% from $169.2 million in 1996. Total net premiums
written in Ireland were (pound)35.0  million  ($57.5  million) in 1997,  up from
(pound)27.5 million ($43.0 million) in 1996.  Total credit  premiums  written in
the U.S. were $125.3 million in 1997 compared with $159.7 million in 1996.

         The  following  table sets forth  information  concerning  the
consolidated  insurance  operations  (U.S.  and Ireland) (in millions):
<TABLE>
<CAPTION>

                                                   Years Ended December 31
<S>                                       <C>            <C>             <C>
Premiums Earned                              1997           1996            1995
                                             ----           ----            ----
Consumer Finance Subsidiaries:
   Credit-related....................     $162.4           $133.5         $104.8
   Other.............................       10.9              3.9            3.9
Independent:
   Credit-related....................        5.7             20.8           23.2
   Ordinary..........................        3.2              7.7            8.8
All Other............................       (4.4)             2.8           12.0
                                          ------           ------         ------
   Total Premiums Earned.............     $177.8           $168.7         $152.7
                                          ======           ======         ======
Operating Income
Consumer Finance Subsidiaries:
   Credit-related...................     $  74.6          $  51.3        $  39.1
   Agencies.........................        20.7             18.0           15.1
   Other............................         2.2              2.9            3.4
                                          ------           ------         ------
      Total.........................        97.5             72.2           57.6
                                          ------           ------         ------
Independent:
   Credit-related...................       (1.0)            (2.8)          (1.5)
   Ordinary.........................        6.2*             0.9            1.0
   Annuity..........................         .1             22.4*           0.6
   Other............................       (0.1)            (0.4)          (0.5)
                                          ------           ------         ------
      Total.........................        5.2             20.1           (0.4)
                                          ------           ------         ------
All Other (primarily unallocated
   investment income and
   capital gains)...................        18.8             17.6           20.2
                                          ------           ------         ------
      Total Operating Income........      $121.5           $109.9         $ 77.4
                                          ======           ======         ======

Net Income                                $ 82.9           $ 74.2         $ 50.6
                                          ======           ======         ======
*Includes gain on disposition of annuity-related assets.
</TABLE>

         Investment income (net of interest paid on annuities)  decreased 15% to
$36.2  million  in 1997 from $42.7  million  in 1996 and $52.1  million in 1995.
Investment  yield  increased to 6.72% at the end of 1997  compared with 6.56% in
1996.  The  decline  is due to the  disposition  of the  annuity  block  and the
investment portfolio.  The market value of investments increased to $487 million
at year-end 1997 from $479 million in 1996.



<PAGE>


Real Estate Investments

         Harbour  Island  is  a  177-acre,  mixed-use  real  estate  development
attractively  located  adjacent  to the  southern  end of the  Central  Business
District in Tampa, Florida. The island is connected to Tampa by two bridges. The
Development of Regional Impact plan for full  development of the island has been
approved and provides for commercial, hotel, residential and retail space.

         At year-end  1997,  the  investment  in and advances to Harbour  Island
amounted to $67 million,  down from $80 million at the end of 1996.  Some of the
more  significant  assets of Harbour  Island include  approximately  53 acres of
undeveloped land, a 300-room "four star" hotel (currently under lease to Wyndham
Hotels),  and a mixed-use  office/retail  operation  currently 87% leased.  This
reduction in the Company's investment was largely due to the sale of two parcels
of land  for  residential  development:  a  four-acre  parcel  acquired  by Post
Properties of Atlanta for a 206-unit,  upscale apartment complex, and a one-acre
parcel  acquired by Destjil  International  for development of a luxury mid-rise
condominium project. In addition, the Harbour Island Athletic Club was sold to a
major national athletic club owner and manager. These sales, which exceeded $7.3
million  in  proceeds,   have  spurred  additional  interest  in  the  remaining
undeveloped land.

         On  a  fully  debt-funded  basis,  Harbour  Island  incurred  a  pretax
operating  loss of $23.0 million for 1997,  compared with pretax losses of $18.7
million in 1996 and $19.5  million in 1995.  The project is charged  interest on
all net cash advanced  since  inception at  Beneficial's  annual  overall melded
cost-of-funds  rate.  Accordingly,  nearly  all of the  losses in  recent  years
represent  interest cost to carry and non-cash  depreciation  charges.  The 1997
results  also  reflect a writedown  from the  anticipated  loss on the sale of a
People Mover System and its infrastructure. As the remaining assets are sold and
substantial cash inflows are received, Harbour Island's losses should decline.

Other Real Estate

         Subsidiaries  of the  Company  also own nearly 700 acres of real estate
adjacent to the Peapack, New Jersey, office complex.  Including buildings,  this
real  estate is carried at  approximately  $15  million.  In January  1998,  the
Company entered into contracts for the sale of  approximately  580 acres of this
real estate that includes the Hamilton Farm property in Bedminster,  New Jersey,
and adjacent property located in Peapack, New Jersey. The sale is subject to due
diligence  inspections,  investigations  of  the  property  and  receipt  of all
necessary governmental approvals and permits by the buyer.

Financing

         The Company and its subsidiaries obtain funds both in the United States
and in foreign markets through sales of long-term debt securities and commercial
paper and through short-term borrowings on unsecured lines of credit from banks.
At December 31, 1997,  long-term debt totaled $8,887 million  (including  $4,175
million of variable-rate medium-term notes) and short-term borrowings aggregated
$4,585  million  (consisting  of $3,770  million  of  commercial  paper and $815
million of bank borrowings). In addition, deposits payable totaled $555 million.
Lines of credit are used to support  commercial  paper borrowings by the Company
and its subsidiaries. At December 31, 1997, the total of all lines of credit was
$4,307 million.  In 1995, in support of commercial paper issuances,  the Company
concluded a $3 billion, five-year,  syndicated revolving credit agreement, which
replaced  the  various  one- and  three-year  bilateral  agreements.  The unused
portion of all lines of credit was $3,851  million at  December  31,  1997.  The
overall,   weighted  average  annual  interest  cost,  including  the  costs  of
maintaining  lines of  credit,  of all short- and  long-term  borrowings  of the
Company and consolidated  subsidiaries was 6.45% ,6.54%, 7.22%, 6.57%, and 6.77%
in 1997, 1996, 1995, 1994 and 1993, respectively.

         Continuously  offered  medium-term notes (MTNs) are the primary vehicle
used by the Company to place  senior-term  debt.  During  1997,  $1.6 billion of
variable-rate MTNs were sold at an all-in cost only slightly above the Company's
cost of commercial  paper  borrowings.  The average  maturity was 3.0 years.  In
addition, fixed-rate

<PAGE>


MTNs  provided $.8 billion in funds during 1997,  at an average  coupon of 6.68%
and a weighted average  maturity of 6.4 years. The Company had available under a
shelf  registration with the Securities and Exchange  Commission $2.1 billion of
unissued debt securities at the end of 1997.

         Additionally,  in July 1997, the Company, together with Beneficial Bank
PLC and  Beneficial  Canada  Inc.,  the  Company's  United  Kingdom and Canadian
operations,  inaugurated a US$2 billion multi-issuer  Euro-MTN (EMTN) program to
augment the Company's domestic MTN platform. In gaining this added access to the
global  markets,  the EMTN program  provides  additional  flexibility,  issuance
options and cost savings.  Thus far, Beneficial Bank PLC has issued 10 notes for
(pound)134  million,  one note for US$75  million and one note for DM33 million,
all  achieving  attractive   variable-rate  financing  with  a  weighted-average
maturity of 4.7 years.

         Beneficial  Corporation  guarantees  the  borrowings  of its  Canadian,
United Kingdom and German  subsidiaries,  thereby  increasing such subsidiaries'
access to local capital markets and minimizing  interest costs for these foreign
operations. The Canadian operation is funded through commercial paper borrowings
and notes sold in the Canadian  financial  market.  The United Kingdom operation
generates  a modest  amount of  deposits  but is  chiefly  funded  through  bank
borrowings,  sterling  commercial  paper sales, and medium-term debt placements.
The German consumer banking subsidiary is funded chiefly with deposits.

Regulations

         Real estate secured loans are  supervised  under and regulated by state
legislation,  which generally requires that the lender be licensed.  Most states
do not limit rate,  but rate is a  competitive  factor  whether  limited or not.
While the statutes of several  states place no maximum limit on the  contractual
term  of  closed-end  loans  secured  by  real  estate,   the  consumer  finance
subsidiaries  generally  limit loans of this type to periods  ranging from 60 to
180 months.  The  consumer  finance  subsidiaries  also operate  under  consumer
finance acts (small loan statutes),  which typically  require that the lender be
licensed.  Licenses are subject to revocation for cause. The  subsidiaries  also
make  non-real  estate  secured  installment  loans  under  statutes  other than
consumer  finance acts. The banking  subsidiaries  are subject to regulations of
certain federal  agencies and undergo  periodic  examination by these regulatory
authorities.

         The insurance operations are subject to regulation in the jurisdictions
in which they are authorized to conduct  business.  Generally,  such laws cover,
among  other  things,  types  of  insurance  that may be  sold,  policy  reserve
requirements,  permissible  investments,  premiums  charged,  limitations on the
amount  of  dividends  payable  by any  insurance  company  and  guidelines  and
standards with respect to dealings between  insurance  companies and affiliates.
In the United States,  most states have also enacted  insurance  holding company
legislation pertaining to insurance companies and their affiliates.

         The  consumer  finance  subsidiaries  are  required  to comply with the
Federal Truth-in-Lending Act, which requires, among other things,  disclosure of
pertinent  elements  of  consumer  credit  transactions,  including  the finance
charges and the comparative  costs of credit  expressed as an annual  percentage
rate. In addition, the subsidiaries are also required to comply with the Federal
Equal Credit Opportunity Act (which prohibits  discrimination in any aspect of a
credit transaction on the basis of sex, marital status,  race, color,  religion,
national origin,  age, receipt of income from a public assistance program or the
good faith exercise of rights under the Federal Consumer Credit  Protection Act)
and with the Real Estate Settlement Procedures Act.

         The products  and  operations  of the  international  subsidiaries  are
subject to regulations in their respective  countries.  The Canadian  operations
are  subject to federal  and  provincial  legislation  which  regulates  various
aspects of its operations, including disclosure of contractual terms, collection
practices and creditor remedies.  The United Kingdom subsidiary is an authorized
institution  under the Banking Act 1987 and, as such, is subject to  supervision
by the Bank of England. As a fully-licensed  German Bank,  Beneficial Bank AG is
regulated  by the  Federal  German  Banking Act and other  Federal and  consumer
legislation.  The Bank is also a member  of the  Deposit  Insurance  System  for
private German banks which provides specific standards for its members.

Competition

         In the consumer  finance  industry,  the  Company's  subsidiaries  face
strong  competition from banks,  savings  institutions,  credit unions,  finance
companies  and other  financial  institutions.  Rate  competition  among finance
companies is minimal for small  consumer  loans.  The  subsidiaries  compete for
these loans primarily on the basis of name recognition,  service and reputation.
There is  considerable  rate  competition  within the home equity  loan  market.
Competition  has  accelerated  in  recent  years,  as  smaller   companies  have
aggressively  entered the sub-prime market using  securitization  as essentially
their sole  funding  tool.  This  approach  has  reduced the cost of capital and
lowered industry entry barriers. In seven years, BNB USA has grown to one of the
nation's  largest  private-label  credit card banks.  This fiercely  competitive
business is based upon service,  pricing and product  flexibility.  In addition,
the  business of the  subsidiaries  may be  adversely  affected in the future by
unforeseen  factors,  such as rate  reductions,  credit  restrictions,  economic
conditions, judicial decisions or legislative acts.

Item 2.  PROPERTIES.

         The Company and its subsidiaries do not hold any substantial  amount of
property  other  than the  real  estate  investments  described  previously  and
properties  acquired  through  a  security  interest.  Substantially  all of the
property utilized by the Company and its subsidiaries are held under lease. Loan
offices  generally  have lease  terms of five years with a renewal  option for a
like term. Most of the leases provide for  cancellation  rights after two years.
Information as to minimum rental  commitments on leased  property and periods of
expiration is contained in Note 26 to the Financial Statements.

Item 3.  LEGAL PROCEEDINGS.

         From  time to time,  the  Company  and its  subsidiaries  are  named as
parties  to various  legal  proceedings  resulting  from its  activities  in the
ordinary  course of business.  These legal  proceedings  may be purported  class
actions or individual actions. While it is impossible to estimate with certainty
the ultimate  legal and financial  liability  with respect to such actions,  the
Company believes that the amount of such liabilities will not result in monetary
damages  which in the  aggregate  would  have a material  adverse  effect on the
financial position of the Company.

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

         Not applicable.



<PAGE>


                               PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS.

         Beneficial  Corporation's  Common Stock is listed on the New York Stock
Exchange.  The aggregate  amounts of common  dividends paid during 1997 and 1996
were $115.5 million and $105.3 million,  respectively.  As of February 27, 1998,
Common Stock was held of record by 13,458 stockholders.  Additional  information
pertaining to the Company's Common Stock is set forth below:
<TABLE>
<CAPTION>

                                           Three Months Ended
<S>                             <C>        <C>       <C>       <C>
                                3/31       6/30      9/30      12/31       Total
1997
Dividends per Common Share...  $ .52      $ .52     $ .57      $ .57       $2.18
Market Price of Common Stock:
    High.....................  76         72-1/4    78-1/8     84-1/8
    Low......................  61         59-1/2    69         73-3/8
    Close....................  64-5/8     71-1/16   76-3/16    83-1/8

1996
Dividends per Common Share...  $ .47      $ .47     $ .52      $ .52       $1.98
Market Price of Common Stock:
    High.....................  58-3/8     61-1/4    59-1/2     66-1/2
    Low......................  43-1/2     54-1/8    50-7/8     57-1/8
    Close....................  57-5/8     56-1/8    57-1/2     63-3/8

</TABLE>



<PAGE>

<TABLE>
<CAPTION>

Item 6.  SELECTED FINANCIAL DATA.
                       BENEFICIAL CORPORATION AND SUBSIDIARIES
                                  FIVE-YEAR SUMMARY
                          (in millions, except where noted)
<S>                                     <C>      <C>      <C>      <C>      <C>
During The Year                         1997     1996     1995     1994     1993
---------------                         ----     ----     ----     ----     ----
Net Income
   Income from Continuing
     Operations (a).....           $   253.7    281.0    150.5    177.7    186.0
   Extraordinary Loss............  $      --       --       --       --    (2.8)
   Net Income..................... $   253.7    281.0    150.5    177.7    183.2
Diluted Earnings per Common
     Share (dollars)
   Continuing Operations (a)...... $    4.54     5.05     2.71     3.26     3.43
   Extraordinary Loss............. $      --       --       --       --    (.05)
   Diluted Earnings per Common
     Share.........                $    4.54     5.05     2.71     3.26     3.38
Average Number of Common Shares
     Outstanding..                      54.7     54.6     53.7     53.0     52.8
Dividends Paid per Common Share
     (dollars)....                 $    2.18     1.98     1.80     1.62     1.43
Gross Revenue...................   $ 2,955.7  2,771.9  2,398.2  2,137.4  1,957.5
Interest Expense................   $   855.0    812.8    816.2    673.6    633.2
Lending Spread..................   $ 1,462.1  1,330.7  1,198.4  1,080.1    974.2
Lending Spread as a % of Average
     Receivables...........            10.11     9.84     9.71     9.65     9.62
Provision for Credit Losses (b).   $   485.3    398.8    280.2    198.7    171.8
Total Expenses..................   $ 2,582.4  2,313.4  2,127.8  1,811.3  1,642.3
Income before Income Taxes......   $   373.3    458.5    270.4    326.1    315.2
% of Monthly Cash Principal
   Collections to
   Average Monthly Balances.....        6.66     5.51     5.03     4.52     3.85
% of Finance Receivables Charged Off
  (less recoveries) to Average
  Monthly Balances (b)...               2.85     2.26     1.64     1.28     1.42

At Year-End
   Finance Receivables........  $15,030.2  14,536.2  13,416.2  12,322.6 11,018.7
   Number of Accounts.........        7.4       7.0       5.1       4.4      3.5
   Allowance for Credit Losses. $   559.9     498.2     406.1     331.6    279.0
   Total Assets...............  $17,645.1  16,931.2  15,737.3  14,376.6 12,916.9
   Short-Term Debt............  $ 4,585.1   4,169.3   4,023.9   3,473.9  2,934.4
   Long-Term Debt.............  $ 8,887.2   8,631.1   7,792.5   7,324.8  6,754.8
   Shareholders' Equity.......  $ 1,772.3   1,694.8   1,503.0   1,400.3  1,312.2
   Book Value per Common Share
     (dollars)................  $   30.53     28.79     25.80     24.34    22.78
   % of Allowance for Credit
      Losses to Finance
      Receivables.............       3.73      3.43      3.03      2.69     2.53
   % of Finance Receivables with
      Delinquency Two Months and
      Greater on a Contractual
      Basis.......                   4.24      3.38      2.98      2.46     2.67
   Holders of Common Shares
      (whole numbers).........     13,800    14,200    14,800    15,300   15,300
   Employees (whole numbers)..     10,200     9,700     9,000     8,500    8,200
   Consumer Finance Offices
      (whole numbers).........      1,234     1,186     1,130     1,090    1,066

(a) 1997  reflects  a $27.8  aftertax  ($.51 per  share)  provision  for loss on
    disposal of the Company's German consumer banking subsidiary and $18.7 ($.34
    per share) of aftertax  special items relating to additional legal reserves,
    a writedown of certain real estate investments and costs associated with the
    Company's re-engineering efforts. Income from continuing operations includes
    a provision for credit losses related to the German liquidating portfolio of
    $15.0  ($.28 per share) in 1995 and $38.0  ($.72 per  share) in 1994,  and a
    $5.9 aftertax ($.11 per share) provision for restructuring in 1995.
(b) 1995 and 1994 do not reflect $15.0 (0.12% of average  monthly  balances) and
    $38.0 (0.33% of average monthly  balances),  respectively,  of credit losses
    related to the German liquidating loan portfolio.

</TABLE>

<PAGE>


Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.

         The  following   discussion  and  analysis  provides  information  that
management  believes  to  be  relevant  to an  understanding  of  the  Company's
consolidated  results of operations  and  financial  condition.  The  discussion
should be read in conjunction with the consolidated financial statements and the
notes thereto.

    Financial Condition

         The  Company's  Board  of  Directors,  at its  February  1998  meeting,
authorized  management  of the Company to consider a full range of tactical  and
strategic alternatives to enhance shareholder value. These alternatives include,
among other things, continuing to pursue or modifying the new strategic focus we
announced in October 1997, the merger or other business combination or strategic
alliance  with  another  entity,  or the sale of the Company.  At this point,  a
comprehensive  effort to identify and pursue the most meaningful  course for the
Company and its shareholders is well under way. We cannot predict the outcome of
the process, nor which, if any, of the alternatives will be recommended.

         The recent decision by the Board of Directors  reflects the culmination
of a comprehensive  strategic analysis undertaken by management to identify ways
to build on core strengths and enhance  shareholder  value. After a full year of
detailed  analysis,  the Company announced a new strategic focus in October 1997
and a number of initiatives to support these efforts,  including the sale of its
Canadian consumer finance subsidiary, its German consumer banking subsidiary and
the divestiture of certain real estate  holdings in New Jersey and Florida.  The
proceeds from the sales are intended to be used to  repurchase  stock and invest
in technological  improvements in the U.S. consumer financial services business.
On February 10, 1998,  the Company  entered into a definitive  agreement for the
sale of its Canadian  operations  and on March 2nd closed the  transaction.  The
sale generated a net aftertax gain in excess of $100 million.

         Also, as part of the announced strategic initiatives, the Company plans
major  re-engineering  efforts,  including  new  technology  for the loan office
network in the United  States.  The  Company  believes  that these  enhancements
should  significantly  improve  overall  systems  performance  by providing more
responsive   technology  for  the  loan  office  staff.   Included  in  the  new
capabilities  would be improved loan  origination,  collection and marketing and
solicitation with  significantly-enhanced  credit decisioning for the individual
loan  offices.  Although the Company  believes that its  re-engineering  efforts
should ultimately improve efficiency and productivity, the Company also believes
that the  costs  associated  with  their  implementation  are  likely  to burden
near-term  operating  earnings  before  benefits  begin to be  realized in 1999.
Potential  risks do exist,  however,  for actual  costs of systems  and  process
improvements  and the related  benefits  to be realized to differ  significantly
from expectations.

         Reflecting two sales by  subsidiaries  of the Company of $1,608 million
of variable-rate  revolving home equity lines of credit through  securitizations
in the capital markets,  the Company's  leverage (the ratio of  interest-bearing
debt to total equity) decreased to 7.91 times at the end of 1997 from 7.93 times
at the end of 1996. The Company also completed two  securitizations  for a total
of $1,919 million in 1996, and is planning further securitizations of comparable
amounts during 1998.

         The Company  believes  sufficient  cash resources  exist to support its
long-term  growth   strategies.   These  resources  include  cash  generated  by
operations  (including  repayments of receivables) and the Company's  ability to
obtain additional financing through short-term  borrowings (primarily commercial
paper supported by committed bank lines) and long-term  borrowings  through both
private and public  debt  offerings.  As of December  31,  1997,  the  Company's
long-term debt was rated A or A+ and commercial paper 1 by all four major rating
agencies.  In February 1998, as a result of the Company's  announcement  to seek
strategic alternatives (as previously discussed), action was

<PAGE>


taken by all  four  major  agencies  regarding  debt  ratings.  Moody's  Ratings
Services,  Inc.  ratings of  long-term  debt is "under  review"  with  direction
uncertain  and  commercial  paper is  "under  review"  for  possible  downgrade.
Standard and Poor's  Ratings  Services  ratings of long-term debt and commercial
paper are on "CreditWatch" pending developing implications. Fitch IBCA's ratings
of long-term debt and commercial  paper are on  "RatingWatch"  pending  evolving
implications and Duff and Phelps' ratings of long-term debt and commercial paper
are on "RatingWatch-Uncertain".

         Total owned finance receivables increased $494 million, or 3%, in 1997,
compared with a gain of $1,120 million, or 8%, in 1996. Removing  receivables of
the  Canadian and German  subsidiaries  from all  periods,  total owned  finance
receivables  increased  $513  million,  or 4%, in 1997,  compared with a gain of
$1,132  million,  or 9%, in 1996.  During 1997,  the United  Kingdom  subsidiary
purchased  the stock of Endeavour  Personal  Finance  Ltd.,  a market  leader in
second mortgage lending,  from Lloyds TSB Group PLC, which increased real estate
loans by $274.9 million.  Reflecting the anticipated paydown of certain maturing
same-as-cash  portfolio  tranches,  Beneficial  National Bank USA (BNB USA), the
Company's  private-label  credit  card  subsidiary  experienced  runoff  of $118
million in 1997,  compared with a gain of $1,326  million during 1996. BNB USA's
ending   receivables   were  $3,752  million.   Reflecting  the   aforementioned
securitizations,  variable-rate real estate receivables  declined $79 million or
3% in 1997.  Fixed-rate real estate receivables  increased $52 million or 2%. In
total,  unsecured  loan  portfolios  represented  59%  of  the  Company's  total
outstandings at year-end 1997,  versus 58% at the end of 1996 and 50% at the end
of 1995.

         Total managed  receivables  increased  $1,082 million,  or 6%, compared
with a gain of $2,331 million, or 16%, in the comparable 1996 period.  Excluding
the  receivables  of  the  Canadian  and  German  subsidiaries,   total  managed
receivables  increased  $1,101  million,  or 7%,  compared with a gain of $2,344
million,  or  17%,  in  the  comparable  1996  period.  Reflecting  this  year's
securitizations,  as well as the remaining balance of receivables  serviced from
previous  securitizations,  total receivables sold with servicing  retained were
$2,913 million at December 31, 1997, and $2,325 million at year-end 1996.

         Total  owned  receivables  delinquent  two  months  and  greater  on  a
contractual basis increased to 4.24% at the end of 1997 from 3.38% at the end of
1996, but remained flat when compared to September 1997. This increase  reflects
both a greater  proportion  of, and higher  delinquency  in, the credit card and
unsecured portfolios in addition to a weaker overall consumer credit environment
primarily in North  America.  On a loans managed  basis,  delinquency  similarly
increased to 4.02% at the end of 1997 from 3.20% at the end of 1996 and 3.94% at
September 30, 1997.  The table that follows  details  delinquency  by product on
both an owned and managed basis for 1997 and 1996.
<TABLE>
<CAPTION>

         Managed Basis                                      Owned Basis
         -------------                                      -----------
    1997              1996        Delinquency           1997            1996
    ----              ----        -----------           ----            ----
<S> <C>               <C>                               <C>             <C>
    3.03%             2.13%       Real Estate Secured   3.14%           2.16%
    5.86              5.81        Personal Unsecured    5.86            5.81
    4.47              3.23        Credit Card           4.47            3.23
    4.17              3.62        Sales Finance         4.17            3.62
    4.02%             3.20%       Overall               4.24%           3.38%

</TABLE>

         Net chargeoffs  were $412.2 million versus $316.9 million in 1996. As a
percentage of average owned receivables,  net chargeoffs increased to 2.85% from
2.26% in 1996. At year-end 1997, the allowance for credit losses as a percentage
of finance receivables owned was 3.73%,  compared with 3.43% at the end of 1996.
At this level,  the allowance  covers full year chargeoffs 1.36 times,  compared
with 1.57 times in 1996.  During the year, the balance of the reserve  increased
$61.7 million to $559.9 million.



<PAGE>


         At March 31, 1996, the Company  effectively sold a $957 million annuity
portfolio of the Central National Life Insurance  Company of Omaha, a subsidiary
of the Beneficial  Insurance Group, to SunAmerica Life Insurance Company through
a co-insurance agreement. Accordingly,  approximately $900 million of investment
securities  were sold or transferred to SunAmerica as part of this  disposition.
SunAmerica has not yet legally  assumed the policies,  therefore,  the remaining
$737  million  in  policy  reserves  related  to the  annuity  portfolio  and an
offsetting  deposit in other assets remain on the Company's balance sheet. These
policy reserves declined $171 million during 1997.

         Investment securities increased $180 million, or 26%, in 1997, versus a
decrease of $805 million,  or 54%, in 1996. The increase is primarily related to
residual  interests  in  securitized  receivables.  The prior year  decrease  is
largely  related  to  the  sale  of the  annuity  portfolio.  See  Note 7 to the
Financial Statements for more information on investment securities.

         During  1997,  approximately  1.2 million  shares of common  stock were
repurchased by the Company at an average price of $66.31 and placed in treasury,
completing the share  repurchase  program  approved by the Board of Directors in
November 1996.

         In  October  1997,  as  part  of  the  previously  mentioned  strategic
repositioning,  the Company's Board of Directors authorized the repurchase of up
to 3.0 million,  or approximately 5.5%, of outstanding common shares. The shares
will be  repurchased  from  time-to-time  at prices  deemed  appropriate  by the
Company,  and will be placed in treasury for general corporate  purposes.  As of
December 31, 1997, 5,000 shares have been repurchased under this program.

    Results of Operations

         Net income in 1997 was $253.7  million  compared  to $281.0  million in
1996 and  $150.5  million  in 1995.  Results  in 1997 were  dampened  by a $58.8
million pretax  provision for the planned  disposition  of the Company's  German
consumer  banking  subsidiary,  a $13.5  million  pretax  addition to litigation
reserves,  a $13.8  million  pretax  writedown  of real estate  holdings in both
Tampa,  Florida,  and Houston,  Texas,  that are being sold,  and a $3.8 million
pretax charge for  reorganization  and  restructuring  efforts  offset by a $7.3
million pretax gain on the sale of the Central  National Life Insurance  Company
of Omaha's  ordinary  life  portfolio.  1996  results  included an $8.4  million
aftertax  annuity-related  capital gain. Excluding the effects of these one-time
items in both years, net income would have increased $23.2 million,  or 9%, over
1996.

         The earnings  improvement in 1996 stemmed primarily from the turnaround
of the  tax  refund  anticipation  loan  (RAL)  business.  For  the  1996  year,
consolidated  results  included  pretax  earnings  of $116.3  million,  or $69.8
million aftertax, from the RAL business,  versus a pretax loss of $62.6 million,
or $37.6 million  aftertax,  in 1995. The RAL business was severely  impacted in
1995 when the Internal  Revenue  Service  (IRS)  released  payment of the earned
income tax  credit  (EITC)  portion on  thousands  of  refunds  directly  to the
taxpayers who had already received these refunds through the RAL program, rather
than to the  Company's  banking  subsidiary to repay the loan as directed by the
taxpayer.  Conversely,  the 1996 RAL results  benefited from prior-year bad debt
collections  of $48.6 million as well as smooth and efficient  processing of tax
refunds by the IRS. For the 1996 season,  the Company's  subsidiary,  Beneficial
National Bank (BNB),  did not lend on the EITC portion of any refunds.  In 1997,
BNB resumed lending on the EITC portion of refunds, primarily to prior customers
in good standing. In 1997, the RAL program earned $72.9 million pretax.

         In July 1996,  BNB signed a new  10-year  agreement  with H&R Block Tax
Services  Inc.,  giving BNB the  exclusive  right to offer RALs to eligible  H&R
Block (Block) customers in all of Block's  company-owned  offices. In return for
the longer-term  exclusivity given to BNB, the new agreement gives Block a share
in both the  revenue and credit  risk of the RALs by  allowing  Block  Financial
Corporation  to  purchase an interest in the  portfolio  of RALs  originated  by
Block's  company-owned  offices.  For the first two years of the  contract,  the
Block  interest  will be 40%; for years three  through 10, the interest  will be
49.99%.  Although some near-term  profits will be sacrificed,  the new agreement
provides  longevity and stability to BNB's RAL product.  Prior agreements called
for the renegotiation of a contract every three years.

         The absolute lending spread increased from the preceding year by 10% in
1997 and 11% in 1996, with the current year increase  primarily  attributable to
higher late fees  coupled  with higher  average  yields on BNB USA  receivables,
reflecting a greater  percentage of  receivables  in  non-deferred  plans.  As a
percentage of average owned receivables, the lending spread was 10.11%, compared
with 9.84% in 1996 and 9.71% in 1995. The yield on the average owned receivables
portfolio  was 16.02% in 1997,  compared with 15.85% in 1996 and 16.32% in 1995.
Over the same  periods,  interest  expense  as a  percentage  of  average  owned
receivables was 5.91% in 1997,  versus 6.01% in 1996 and 6.61% in 1995. In North
America,  the  fixed-rate  real estate  secured  loans  originated  in 1997 were
written at an average  yield of 12.74%,  compared with 13.23% in 1996 and 13.85%
in 1995, while  variable-rate real estate secured loans were written at a spread
over  prime  of   approximately   343  basis  points  in  1997,   compared  with
approximately  366 and 400 basis points during the respective prior two years in
response to  competitive  pressures.  In 1997,  the average  yield on  unsecured
personal  loans  written in North  America was 25.79%,  compared with 25.64% and
25.41% in 1996 and 1995,  respectively.  The yield on the credit card  portfolio
was 17.99% in 1997, versus 16.02% in 1996 and 17.45% in 1995.

         During  1997,   interest  expense  increased  $42.2  million  from  the
preceding  year and  decreased  $3.4  million  in 1996  compared  to 1995.  1997
worldwide  average  borrowing  costs  decreased to 6.45% from 6.54% in 1996, and
7.22% in 1995.  Higher  borrowing  levels added $57.4 million in 1997 and $101.4
million in 1996 in interest costs from each respective preceding year, while the
corresponding  fluctuations resulting from interest rate changes were a decrease
of $15.2 million in 1997 and $104.8 million in 1996.  The Company  minimizes its
exposure  to  interest-rate  risk  by  closely  managing  the  gap  between  its
interest-sensitive  assets and liabilities.  The Company utilizes  interest rate
swaps and forward rate  agreements  to moderate  its  exposure to  interest-rate
fluctuations.  See  Notes  2h  and  24 to  the  Financial  Statements  for  more
information on derivatives.

         BNB USA's profitability rebounded during 1997 with $75.0 million pretax
profits  versus a virtual  break-even  in 1996 and $35.1  million  in 1995.  The
current year results  were driven by  favorable  changes in late fee  structure,
higher average yields, reduced growth provisioning and volume-related  expenses,
partially  offset by heavy  chargeoffs.  The favorable  results also reflect the
renegotiations  of contracts with several  merchant  partners.  In 1996, BNB USA
profitability  was dampened by $65 million of up-front loan loss provisioning on
the strong  receivables  growth  experienced in 1996 and $10 million of start-up
costs relating to programs for Kmart and Costco.

         The Beneficial  Insurance Group, Inc., reported pretax income of $105.6
million  in  1997,   versus  $104.0  million   ($79.6   million   excluding  the
annuity-related  capital gains) in 1996 and $77.1 million in 1995.  These trends
reflect  the   continuation  of  strong   production  of  credit  insurance  and
well-controlled loss ratios, particularly in the credit property lines. The sale
of the  Central  National  Life  Insurance  Company  of  Omaha's  ordinary  life
portfolio was completed during the second quarter of 1997, resulting in a pretax
gain of $7.3 million.

         Subsidiaries outside the United States contributed $53.4 million pretax
earnings  in 1997  (excluding  the $58.8  million  provision  for loss on German
disposition),  $44.0 million  pretax  earnings in 1996 and $20.1 million  pretax
earnings in 1995. The Canadian and German subsidiaries  contributed an aggregate
of $14.5  million  and $21.6  million in pretax  earnings  during 1997 and 1996,
respectively, and a pretax loss of $6.0 million in 1995.

         Harbour  Island,  Inc., the Company's real estate  subsidiary in Tampa,
Florida,  recorded a pretax loss, on a fully debt-funded basis, of $23.0 million
in 1997,  up from $18.7  million in 1996,  and $19.5  million in 1995.  The 1997
results reflect the sale of the Athletic Club,  residential land and a writedown
from  the  anticipated  loss  on the  sale  of a  People  Mover  System  and its
infrastructure,  which is included in the $13.8 million pretax writedown of real
estate holdings previously mentioned. The sales reduced the Company's investment
in Harbour  Island by  approximately  $13  million.  Nearly all of the losses in
recent years represent  imputed interest costs computed at the Company's overall
melded cost of funds rate and depreciation charges. As mentioned previously, the
Company intends to accelerate the divestiture of certain real estate holdings on
the  island.  The pretax  loss  relating  to Harbour  Island  Inc.  is likely to
continue at current levels excluding the current year real estate losses,  until
substantial portions of the real estate on Harbour Island are sold.



<PAGE>


         Other  revenues in 1997 remained flat from the preceding year following
an  increase  of 99% in 1996,  as a  decrease  in RAL  revenue  was offset by an
increase in  servicing  revenue  and gain on sale  associated  with  securitized
receivables. The 1996 increase in other revenue of $228.8 million related to the
previously mentioned turnaround of the RAL business, the capital gain related to
the disposition of the annuity portfolio,  increased  servicing revenue and gain
on sale associated with securitized receivables.

         The provision for credit losses  increased  $86.5  million,  or 22%, in
1997 compared with an increase of $118.6 million, or 42%, in 1996. The increases
in 1997  and  1996  reflect  higher  chargeoffs,  as well  as  additions  to the
allowance for credit losses  corresponding  to increased  unsecured  receivables
growth. The increase in chargeoffs were entirely in the unsecured product lines,
reflecting  both the  expected  maturing of the BNB USA  portfolio  and a higher
incidence of  bankruptcies  in North  America.  As a percentage of  receivables,
credit  card  chargeoffs  increased  to 4.84% in 1997  from  3.81% in 1996,  and
personal unsecured chargeoffs increased to 4.99% from 4.55% in 1996.  Management
expects  this credit card trend to continue in 1998 (though at a less rapid rate
of increase than in prior years) as the portfolio  matures,  while the chargeoff
rates on the personal unsecured  portfolio will continue to reflect the economic
cycle and the economic  health of the  consumer.  Higher  chargeoffs  could also
result from the onset of a recession or similar  downturn in the economic cycle,
particularly in North America, resulting in adverse consequences to the economic
health of the  consumer.  As a  percentage  of average  owned  receivables,  the
provision was 3.36%, compared with 2.95% in 1996.

         To date, the Company's U.S.  consumer  finance  subsidiaries  generally
lend to a cap of 75% (including  the existing  first  mortgage) of the appraised
value of the home on second  mortgage  loans,  but will go to 80% in the case of
first mortgages. Beginning in 1998, U.S. loan offices will be permitted to go to
90% loan-to-value ratio on both first and second mortgages,  although subject to
stringent underwriting  requirements and improved risk-based pricing guidelines.
While this change could result in increased chargeoffs, management believes that
such  increase  will be  offset  by  additional  revenues  as a  result  of both
increased loan growth and improved pricing.

         Salaries and other operating  expenses  combined were up 9% in 1997 and
10% in 1996 over the  respective  prior years.  Included in the 1997 figures are
$31.1  million of pretax  special  items  including  writedowns  of real  estate
holdings that are in the process of being sold,  additional  litigation reserves
and charges for restructuring and reorganization  efforts,  primarily  personnel
related.  Excluding these special items from 1997,  salaries and other operating
expenses  increased 6%, generally  reflecting  normal increases  attributable to
growth in  receivables.  In 1996,  these trends also  reflected  the  previously
mentioned costs associated with new merchant programs,  and expenses relating to
a second  data  center  opened  during  the  fourth  quarter  of 1996.  The 1996
comparisons  with the prior year benefited  from lower RAL collection  expenses,
and savings from the  fourth-quarter  1995  restructuring.  As a  percentage  of
average managed  receivables,  salaries and other operating  expenses were 6.57%
(6.39%  excluding  special  items),  6.65%  and 6.85% in 1997,  1996,  and 1995,
respectively.

         The Company  previously  announced  its intent in December 1994 to sell
its German  subsidiary.  However,  in December 1995,  the Company  announced the
decision to retain the  operation  because no acceptable  offers were  received.
Since  negotiations  and other  efforts did not progress as  anticipated  in the
original  loss  estimates,  the Company  recorded a $15.0  million,  or $.28 per
share, charge in 1995 for additional  potential losses relating to a significant
liquidating  loan  portfolio.  In 1997,  as part of a  strategic  initiative  to
enhance  profitability  and build  shareholder  value, the Company announced its
intent to sell the German  operations  once again.  The Company  anticipates the
sale to occur in the short term.  While there can be no assurance  that the sale
will be consummated,  the sale is expected to result in a loss of $27.8 million,
which  loss was  recognized  in 1997  results  as  previously  mentioned,  after
consideration  of a  $31.0  million  tax  benefit,  primarily  generated  by the
expected  utilization of capital losses.  However, if the business is liquidated
by other means, additional losses may be possible.

         In the fourth quarter of 1995, the Company implemented programs to exit
the Beneficial  Insurance  Group annuity  business,  and  implemented an expense
reduction program  principally within  headquarters  operations.  These programs
resulted in a $9.8 million pretax  restructuring  charge, which is largely early
retirement and severance expenses  corresponding to workforce reductions of 225.
This restructuring charge reduced net income by $5.9 million or $0.11 per share.

         Although  the  statutory  rate  was 35% for all  years,  the  Company's
effective  tax rates  were 32.0% in 1997,  38.7% in 1996 and 44.3% in 1995.  The
effective rate in 1997 recognized tax benefits  related to the anticipated  sale
of the Company's  German  subsidiary.  The effective rate in 1996 benefited from
approximately  $8.0  million  of  additional  foreign  tax  credit  utilization,
resulting from the Company's  election to modify the methodology for calculating
foreign tax credit limitations.  The effective tax rate was substantially higher
in 1995 due to the German charges, which were not offset by tax benefits. Beyond
these items,  taxes are higher than the U.S.  federal  statutory  rate primarily
because of state income taxes.  At December 31, 1997 and 1996, the Company's net
deferred tax assets were $302.7 million and $232.3  million,  respectively.  The
deferred  tax assets  were net of $3.3  million  and $8.0  million of  valuation
allowance at year-end 1997 and 1996,  respectively.  Management has  determined,
based on the Company's history of prior operating  earnings and its expectations
for future earnings,  that operating income of the Company will be sufficient to
recognize  fully these  deferred tax assets after the valuation  allowance.  See
Note 17 to the Financial Statements for further discussion.

         In 1992,  the IRS completed its  examination  of the Company's  federal
income tax returns for 1984 through 1987 and proposed  certain  adjustments that
relate  principally to activities of the Company's former  subsidiary,  American
Centennial  Insurance Company,  prior to its sale in 1987. Although  prepayments
were made thereon in 1992, the Company contested the proposed adjustments within
the administrative appeals process of the IRS. During the third quarter of 1996,
the IRS  issued a  statutory  Notice  of  Deficiency  asserting  the  unresolved
adjustments. The Company has initiated litigation in the United States Tax Court
to oppose the disallowance.  Management does not expect the ultimate  resolution
of these issues to have a material effect on the Company's  financial  position,
results of  continuing  operations  or  liquidity.  See Note 28 to the Financial
Statements for further discussion of the assessment.

         During the fourth quarter of 1996,  the Company  decided to implement a
broad-based   option  program  for   substantially  all  employees  who  do  not
participate in the existing option plan.  This program  resulted in the issuance
on January 31, 1997, of options to purchase  approximately 989,000 common shares
at a strike price 20% above the then prevailing market price. A second grant was
made in November  1997,  of options to  purchase  approximately  943,000  common
shares at a strike price 20% above the then prevailing market price. See Note 20
to the Financial Statements for further information regarding stock options.

    Changes in Cash Flow and Liquidity

         The principal  sources of cash are collections of finance  receivables,
proceeds from the issuance of short-and  long-term  debt, and cash provided from
operations (including maturities and repayments of its receivables). The monthly
collections of cash principal as a percentage of average  receivables were 6.66%
in 1997  and  5.51% in 1996,  principally  reflecting  the  paydown  of  certain
maturing  same-as-cash  portfolio  tranches at BNB USA. Also, from time to time,
subsidiaries  of the Company sell home equity loans through  securitizations  in
the capital markets.

         Substantial  additional  liquidity is available  through committed bank
credit  lines that the  Company  maintains  in support of its  commercial  paper
borrowings.  During the fourth  quarter of 1995,  the Company  entered into a $3
billion,  five-year  syndicated  revolving credit agreement,  which replaced the
various one- and three-year bilateral  agreements,  totaling $2.9 billion,  that
the  Company  had  previously  maintained.   This  syndicated  revolving  credit
agreement  has a $1.0 billion net worth test.  At year-end  1997,  total standby
lines of credit were $4.3 billion, of which $3.9 billion was unused.

         One of the  Company's  financial  strengths  is its  ability  to  raise
long-term  debt  in a  wide  variety  of  domestic  and  international  markets.
Including  medium-term  notes,  long-term debt  represented 63% of the Company's
funding base at the end of 1997, compared with 64% at the end of 1996. Excluding
the Company's Canadian and German  subsidiaries,  long-term debt represented 65%
of the funding base at the end of 1997, compared with 66% at the end of 1996. In
1997, the Company issued $1.6 billion in variable-rate  medium-term  notes at an
all-in  cost  only  slightly  above  the  Company's  cost  of  commercial  paper
borrowings.  The average  maturity was 3.0 years.  Fixed-rate  medium-term  note
issuances  totaled $0.8  billion,  at an average  coupon of 6.68% and an average
maturity  of 6.4 years.  In  addition,  the Company  had  available  under shelf
registrations  with the  Securities  and  Exchange  Commission  $2.1  billion of
unissued debt securities at year-end 1997.

         The  Company  hedges the  majority  of its net  investments  in foreign
subsidiaries   by  selling   at-the-money   (spot)   call   options  and  buying
out-of-the-money (spot) put options on British pounds. With the exception of the
strike rates,  all terms of the call and put are identical.  The notional amount
of each  option is an amount that will  generally  produce  offsetting  gains or
losses (on an aftertax  basis) to the gains or losses produced by the underlying
investment.  The  combination  of  these  instruments  (a "no cost  collar")  is
effectively a partial hedge, as hedging gains or losses occur only when the spot
rates fluctuate outside the range of the respective  strike rates.  These option
transactions  generally have a maturity of three to six months. Foreign currency
forward  exchange  agreements  and foreign  currency  swaps are also utilized to
hedge a portion of the Company's net investment in foreign subsidiaries.

         The Company monitors the effectiveness of its hedging program through a
quarterly  analysis  comparing the foreign  exchange gains and losses on the net
investments  in foreign  operations  to hedge  gains and losses due to  currency
fluctuations.  Hedge gains and losses are  calculated  by  comparing  the option
strike rate to the spot exchange rate on each financial statement date as though
the option was exercised at that time.  There were no amounts  recognized in net
income during the three years ended December 31, 1997. Prospectively,  gains and
losses in excess of the amount  needed to offset gains or losses on  investments
in foreign  subsidiaries  due to currency  fluctuations are not likely given the
above  hedging  strategy.  See Notes 2h and 24 to the Financial  Statements  for
further information on derivatives.

         The Company  minimizes  all  off-balance-sheet  credit risk exposure by
limiting  the  counterparties  to  major   international   banks  and  financial
institutions.   The  Company  has  never   experienced   nonperformance  by  any
counterparty.

    Year 2000 Date Conversion

         In 1995, the Company  initiated an  enterprise-wide  program to prepare
its  computer  systems  and  applications  for the  year  2000.  Certain  of the
Company's  systems are dependent on outside sources (RAL program being dependent
on the IRS) which the Company has  considered in its plan for  remediation.  The
Company has incurred and will continue to incur  internal staff costs as well as
consulting  and  other  expenses  related  to   infrastructure   and  facilities
enhancements  necessary  to  prepare  its  systems  for the year  2000.  Project
completion  is expected in mid 1999 at an estimated  cost of  approximately  $20
million.  The Company expects this program to be completed on a timely basis and
will not have any material adverse effect on its business  operations,  products
or financial prospects.  However,  there can be no assurance that the systems of
other entities on which the Company's systems rely also will be timely converted
or that any such failures to convert by another entity would not have an adverse
effect on the Company's systems.

    Recent Accounting Pronouncements

         The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
SFAS 130  requires  that all items  that are  required  to be  recognized  under
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial  statements.  The Company will adopt SFAS No. 130 beginning January 1,
1998.

         The FASB has issued SFAS No.  131,  "Disclosures  about  Segments of an
Enterprise  and Related  Information."  SFAS No. 131  establishes  standards for
reporting  information about operating  segments in annual financial  statements
and  requires  reporting of selected  information  about  operating  segments in
interim financial reports issued to stockholders.  It also establishes standards
for related disclosures about products and services,  geographic areas and major
customers. The Company will adopt SFAS No. 131 beginning January 1, 1998.



<PAGE>



Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    Market Risk Discussion

         The  Company is  exposed to market  risks,  including  fluctuations  in
interest rates,  variability in spread  relationships  (Prime to Libor spreads),
mismatches  of  repricing  intervals  between  finance  receivables  and related
funding obligations, and variability in currency exchange rates. The Company has
established  policies and internal processes  governing its management of market
risks and its use of financial instruments to manage its exposure to such risks.
Detailed  information  relating to such practices is set forth in  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
Item 7 and in Notes 2h and 24 of the Notes to Financial  Statements  included in
the Company's 1997 Annual Report to Shareholders.

    Interest Rate Sensitivity

         Based on the Company's overall  interest-rate  exposure at December 31,
1997, a 10% movement in interest  rates  affecting the Company's  fixed rate and
variable rate financial  instruments would have an immaterial effect on the fair
values of market risk sensitive instruments and earnings over the next year.

    Exchange Rate Sensitivity

         Based on the Company's  overall  currency rate exposure at December 31,
1997, a 10% movement of the U.S. dollar against functional  currency rates would
have an immaterial  effect on the fair value of Company's  net exposed  position
and earnings over the next year.



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



FORWARD-LOOKING STATEMENTS

         The Company has made  forward-looking  statements in this Annual Report
based on current  expectations  that involve a number of risks and uncertainties
that could cause actual results to differ  materially.  The potential  risks and
uncertainties  that could cause actual results to differ materially  include the
ultimate costs of the systems and process  improvements  and the degree to which
benefits from the systems and process improvements are realized;  the results of
the refund anticipation loan business;  the ultimate successful  consummation of
the sale of the Canadian and German  subsidiaries;  continuing  competitive  and
pricing pressures;  continuing increases in the incidence of consumer bankruptcy
in North  America;  and the onset of a  recession  or a similar  downturn in the
economic cycle in North America resulting in adverse consequence to the economic
health of the  consumer.  Further  information  on factors that could affect the
Company's  financial  results are  included in the  Company's  filings  with the
Securities  and Exchange  Commission,  including this Annual Report on Form 10-K
for the year ended December 31, 1997.



<PAGE>


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         INDEPENDENT AUDITORS' REPORT


TO THE STOCKHOLDERS AND BOARD OF DIRECTORS
OF BENEFICIAL CORPORATION:

         We  have  audited  the  accompanying  consolidated  balance  sheets  of
Beneficial  Corporation  and  Subsidiaries as of December 31, 1997 and 1996, and
the related  consolidated  statements  of income and retained  earnings and cash
flows for each of the three years in the period ended  December  31,  1997.  Our
audits also included the  financial  statement  schedule  listed in the Index at
Item 14. These  financial  statements and financial  statement  schedule are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on the financial statements and financial statement schedule based on
our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, such consolidated  financial statements present fairly,
in all material respects,  the financial position of Beneficial  Corporation and
Subsidiaries  as of  December  31,  1997  and  1996,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted  accounting  principles.
Also, in our opinion,  such financial  statement  schedule,  when  considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly in all material respects the information set forth therein.



/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Parsippany, New Jersey
January 28, 1998




<PAGE>

<TABLE>
<CAPTION>

                      BENEFICIAL CORPORATION AND SUBSIDIARIES
                                BALANCE SHEET

                                                    Years Ended December 31
<S>                                               <C>                    <C>
                                                  1997                   1996
                                               -----------           -----------
                                                         (in millions)
ASSETS
Cash Equivalents.............................  $     253.9           $     279.6
Finance Receivables (Note 5).................     15,030.2              14,536.2
   Allowance for Credit Losses (Note 6)......       (559.9)              (498.2)
                                                -----------           ----------
Net Finance Receivables......................     14,470.3              14,038.0
Investment Securities (Note 7)...............        866.2                 686.1
Property and Equipment.......................        229.3                 204.9
Other Assets (Note 8)........................      1,825.4               1,722.6
                                                ----------            ----------
   TOTAL ASSETS..............................    $17,645.1             $16,931.2
                                                 =========             =========
LIABILITIES AND SHAREHOLDERS' EQUITY

Short-Term Debt (Note 10)....................   $  4,585.1            $  4,169.3
Deposits Payable.............................        555.3                 635.0
Long-Term Debt (Note 11).....................      8,887.2               8,631.1
                                                ----------             ---------
   Total Interest-Bearing Debt...............     14,027.6              13,435.4
Accounts Payable and Accrued Liabilities (Note 9)    708.0                 534.0
Insurance Policy and Claim Reserves..........      1,137.2               1,267.0
                                                ----------            ----------
   Total Liabilities.........................    $15,872.8             $15,236.4
                                                 =========             =========
Shareholders' Equity:
Preferred Stock (Note 12)...................         114.8                 114.8
Common Stock (160.0 shares authorized; 53.3
   and 54.0 shares outstanding) (Note 12)...          53.3                  54.0
Additional Capital (Note 13)................         250.7                 305.3
Net Unrealized Gain on Investment Securities
   (Note 7).................                           5.2                   2.6
Accumulated Foreign Currency Translation
   Adjustments..................                     (48.2)               (45.4)
Retained Earnings...........................       1,396.5               1,263.5
                                                 ---------             ---------
   Total Shareholders' Equity..............        1,772.3               1,694.8
                                                 ---------             ---------
      TOTAL LIABILITIES AND SHAREHOLDERS'
            EQUITY.                              $17,645.1             $16,931.2
                                                 =========             =========

See Notes to Financial Statements.

</TABLE>

<PAGE>



                        BENEFICIAL CORPORATION AND SUBSIDIARIES
                       STATEMENT OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>

                                                Years Ended December 31
<S>                                        <C>            <C>           <C>
                                           1997           1996          1995
                                        (in millions, except per share amounts)
REVENUE
Finance Charges and Fees..........       $2,317.1        $2,143.5      $2,014.6
Interest Expense..................          855.0           812.8         816.2
                                         --------        --------      --------
   Lending Spread.................        1,462.1         1,330.7       1,198.4
Insurance Premiums................          177.8           168.7         152.7
Other (Note 18)...................          460.8           459.7         230.9
                                         --------        --------      --------
   Total..........................        2,100.7         1,959.1       1,582.0
                                         --------        --------      --------

OPERATING EXPENSES
Salaries and Employee Benefits....          434.9           412.6         384.6
Insurance Benefits................           71.1            82.8          80.4
Provision for Credit Losses.......          485.3           398.8         280.2
Provision for Loss on German Disposal
  (Note 3)....................               58.8              --            --
Provision for Credit Losses on German
   Liquidating Loan Portfolio (Note 3).        --              --           15.0
Provision for Restructuring (Note 4)...        --              --            9.8
Other (Note 19)........................     677.3           606.4          541.6
                                         --------        --------       --------
   Total...............................   1,727.4         1,500.6        1,311.6
                                         --------        --------       --------
Income Before Income Taxes.............     373.3           458.5          270.4
Provision for Income Taxes (Note 17)...     119.6           177.5         119.9
                                         --------        --------       --------
NET INCOME.............................     253.7           281.0          150.5
Retained Earnings, Beginning of Period.   1,263.5         1,093.0        1,042.2
Dividends Paid (Note 21)...............     120.7           110.5           99.7
                                         --------        --------       --------
RETAINED EARNINGS, END OF PERIOD.......  $1,396.5        $1,263.5       $1,093.0
                                         ========        ========       ========

BASIC EARNINGS PER COMMON SHARE (Note 23)$   4.68        $   5.19       $   2.77
                                         ========        ========       ========

DILUTED EARNINGS PER COMMON SHARE
   (Note 23).......................      $   4.54        $   5.05       $   2.71
                                         ========        ========       ========

DIVIDENDS PER COMMON SHARE.........      $   2.18        $   1.98       $   1.80
                                         ========        ========       ========

AVERAGE COMMON SHARES OUTSTANDING
   (Note 23).......................          54.7            54.6           53.7
                                         ========        ========       ========

See Notes to Financial Statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                       BENEFICIAL CORPORATION AND SUBSIDIARIES
                               STATEMENT OF CASH FLOWS

                                                  Years Ended December 31
<S>                                           <C>            <C>           <C>
                                              1997           1996          1995
                                                        (in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income.............................$    253.7     $    281.0     $    150.5
Reconciliation of Net Income to Net
   Cash Provided by
   Operating Activities:
      Provision for Credit Losses......     485.3          398.8          280.2
      Provision for Loss on German
          Disposal.....................      58.8             --             --
      Gain on Securitized Receivables..     (73.5)         (55.3)         (15.4)
      Provision for Credit Losses on German
         Liquidating Loan Portfolio....       --             --             15.0
      Provision for Restructuring......       --             --              9.8
      Provision for Deferred Income
         Taxes.........................     (71.5)         (32.5)         (35.0)
      Depreciation and Amortization....      46.8           49.6           48.8
      Insurance Policy and Claim
         Reserves......................    (129.8)           1.5          180.8
      Accounts Payable and Accrued
         Liabilities...................     108.2          24.1            50.2
                                         ----------     ---------     ----------
         Net Cash Provided by Operating
              Activities................    678.0         667.2          684.9
                                         ----------     ---------     ----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Receivables Originated or Acquired...(13,898.9)     (12,341.8)      (9,860.3)
   Receivables Collected................ 11,505.2        8,954.0        7,443.3
   Receivables Securitized..............  1,607.8        1,919.3        1,103.8
   Available-For-Sale Investments
        Purchased.......................   (463.3)        (492.8)        (313.9)
   Held-To-Maturity Investments Purchased    (7.4)         (13.0)         (78.2)
   Available-For-Sale Investments Sold...   347.8        1,058.5           97.5
   Available-For-Sale Investments Matured    61.6          372.9          154.5
   Held-To-Maturity Investments Matured..    16.2            5.3           21.1
   Property and Equipment Purchased......   (62.6)         (62.6)         (37.2)
   Deposit from Reinsurers...............   120.4         (908.3)          --
   Interest in Residual Certificates.....  (127.4)         (10.8)         (34.1)
   Other.................................   (43.6)           72.5           34.1
                                         --------        ---------     ---------
         Net Cash Used in Investing
                Activities...............  (944.2)      (1,446.8)      (1,469.4)
                                         --------        ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Short-Term Debt, Net Change...........   190.8           88.9          556.4
   Deposits Payable, Net Change..........   (28.7)           9.2          (29.4)
   Long-Term Debt Issued................. 2,829.5        2,782.3        3,102.1
   Long-Term Debt Repaid.................(2,550.4)      (1,983.8)      (2,661.3)
   Dividends Paid........................  (120.7)        (110.5)         (99.7)
   Common Stock Repurchased..............   (80.0)           --              --
                                         ---------      ---------       --------
         Net Cash Provided by Financing
                Activities...............    240.5         786.1          868.1
                                         ---------      ---------       --------

NET (DECREASE) INCREASE IN CASH AND
   EQUIVALENTS..........................     (25.7)           6.5           83.6
Cash and Equivalents at Beginning of
   Period.......................             279.6          273.1          189.5
                                         ---------      ---------      ---------
CASH AND EQUIVALENTS AT END OF PERIOD..  $   253.9      $   279.6      $   273.1
                                         =========      =========      =========

SUPPLEMENTAL CASH FLOW INFORMATION
   Interest Paid......................   $   847.8      $   816.2      $   823.4
   Income Taxes Paid..................       181.5          222.9          154.8
See Notes to Financial Statements.

</TABLE>

<PAGE>


                       BENEFICIAL CORPORATION AND SUBSIDIARIES
                              NOTES TO FINANCIAL STATEMENTS
                        (in millions, except per share amounts)


1.    NATURE OF OPERATIONS

      Beneficial  Corporation  (Company) is a holding  company,  subsidiaries of
      which provide  financial  services through their various consumer finance,
      banking and insurance  operations  located  throughout  the United States,
      Canada,  Germany,  Ireland and the United Kingdom. The Beneficial consumer
      finance loan office  network  includes more than 1,200  offices,  offering
      both  real  estate  secured  loans  and  unsecured   loans,   as  well  as
      credit-related insurance products.  Additionally, other subsidiaries offer
      credit card  products  (largely  private-label),  tax refund  anticipation
      loans and selected  non-credit-related  insurance products.  Approximately
      40% of loans owned outstanding are secured by real estate. The majority of
      net income is derived  from the  consumer  finance  operations  and credit
      insurance products related to the consumer finance business. Operations in
      any one country  outside the United States are not significant in relation
      to the Company's overall operations.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES

      a) Basis of Consolidation.  The consolidated  financial statements include
      the accounts of the Company and its subsidiaries, after elimination of all
      significant intercompany accounts and transactions, and have been prepared
      in accordance  with  generally  accepted  accounting  principles.  Certain
      prior-period  amounts  have been  reclassified  to  conform  with the 1997
      presentation.

      b) Use of Estimates. The preparation of financial statements in conformity
      with generally accepted accounting  principles requires management to make
      estimates and assumptions  that affect the reported  amounts of assets and
      liabilities,  disclosure of contingent  assets and liabilities at the date
      of the  financial  statements  and the  reported  amounts of revenues  and
      expenses  during the reporting  period.  Actual  results could differ from
      those estimates.

      c) Finance  Operations.  The  financial  statements  are  prepared  on the
      accrual basis. Finance charges are recognized as income using the interest
      method or methods that  produce  similar  results.  The net amount of loan
      origination  fees and  direct  loan  origination  costs are  deferred  and
      amortized  into interest  income over the  estimated  lives of the related
      loans.  Direct  origination  costs  for  credit  cards  are  deferred  and
      amortized over 12 months.  Income accrual is generally  suspended after 30
      days on delinquent loans.

      Premiums paid on receivables  purchased are amortized using  straight-line
      and accelerated methods generally over the estimated life of the loans.

      Provisions  for credit losses are charged to income in amounts  sufficient
      to maintain the allowance for credit losses at a level considered adequate
      to cover the losses of principal  and interest in the finance  receivables
      portfolio.

      Delinquent real estate secured  receivables  are reviewed  individually by
      management,  and accounts  known to be  uncollectible  are charged off. In
      general,  other receivables are automatically charged off after no payment
      has been made for six months.  For all types of loans,  collection efforts
      are generally continued.



<PAGE>


      Real estate  properties  acquired  through  foreclosure are carried at the
      lower of cost or estimated  fair market value,  minus  estimated  costs to
      sell, determined on an individual asset basis. Valuations are periodically
      performed  by  management,   and  an  allowance  for  possible  losses  is
      established  if the book value  exceeds the  estimated  fair market  value
      minus estimated costs to sell. Residual gains or losses on disposition are
      recorded in expense as incurred.

      Certain real estate secured loans are accounted for as foreclosed property
      (in-substance  foreclosure)  even  though the actual  foreclosure  has not
      occurred. Such loans continue to be reported in finance receivables. These
      loans are carried at the lower of cost or estimated fair market value when
      the  borrower  has little or no equity in the  collateral  at its  current
      estimated fair market value and it appears unlikely that the borrower will
      repay the loan other than through liquidation of the property.

      d) Receivables Sold with Servicing Retained. Periodically, subsidiaries of
      the  Company  sell home  equity  loans to trusts  created  as real  estate
      mortgage investment conduits and retain the servicing. At the date of such
      securitizations,  the Company  allocates the total cost of the home equity
      loans to mortgage  servicing  rights and the loans based on their relative
      fair  values.  Fair  values are  determined  based on present  valuing the
      expected  future cash flows using a discount  rate  commensurate  with the
      risks involved, adjusted for prepayments and bad debts.

      On January 1, 1997,  the Company  adopted the  provisions  of Statement of
      Financial  Accounting  Standards (SFAS) No. 125, "Accounting for Transfers
      and Servicing of Financial Assets and Extinguishments of Liabilities." For
      each servicing  contract in existence  before January 1, 1997,  previously
      recognized  excess  servicing  assets  that  do not  exceed  contractually
      specified  servicing  fees were  combined  and  recognized  as a servicing
      asset.

      Previously recognized servicing assets that exceed contractually specified
      servicing fees were  reclassified as interest-only  strips and are carried
      at fair value. Both the servicing assets and the interest-only  strips are
      included in other assets on the balance  sheet.  The servicing  assets are
      amortized in proportion  to, and over the period of,  estimated net future
      servicing fee income.  The servicing assets are periodically  reviewed for
      valuation  impairment.  This review is performed on a disaggregated  basis
      for the predominate risk characteristics of the underlying loans which are
      loan type,  term,  interest rate,  prepayment rate and loss rate. The fair
      value of the servicing assets and  interest-only  strips are determined by
      present valuing the estimated net future cash flows. The  weighted-average
      assumptions used in the fair value calculations  include:  discount rate -
      15%, prepayment rate - 34%, loss rate - 1.3%, and servicing fees - 1.0%.

      e) Insurance Operations.  The Company's insurance subsidiaries are engaged
      in writing  credit  life,  credit  accident and health  insurance,  credit
      property,  credit  involuntary  unemployment  insurance  and ordinary life
      insurance.  Premiums on credit life  insurance are taken into income using
      the  sum-of-the-months  or  actuarial  methods,  except  in  the  case  of
      level-term contracts,  which are taken into income using the straight-line
      method over the lives of the  policies.  Premiums on credit  accident  and
      health  insurance are generally  taken into income using an average of the
      sum-of-the-digits  and the  straight-line  methods.  Premiums  for  credit
      property and credit involuntary unemployment insurance are generally taken
      into  income  using the  sum-of-the-months  method or on a pro rata basis.
      Premiums  for  ordinary  life  insurance  are included in income when due.
      Premiums  collected  on annuity  contracts  are included as a liability in
      insurance  policy and claim  reserves.  Policy  reserves  for credit life,
      credit  accident  and  health  insurance,   credit  property,  and  credit
      involuntary unemployment insurance are equal to related unearned premiums.
      Additionally,  claim reserves for credit life,  credit accident and health
      insurance,  credit property, and credit involuntary unemployment insurance
      are  adjusted to reflect  claim  experience.  Liabilities  for future life
      insurance  policy  benefits  associated  with ordinary life  contracts are
      accrued when premium  revenue is recognized  and are computed on the basis
      of  assumptions  as  to  investment  yields,   mortality,   morbidity  and
      withdrawals.


<PAGE>


      f) Valuation of Investment  Securities.  Investments are owned principally
      by the insurance  subsidiaries  and consist  primarily of debt securities.
      Investments in debt securities that the subsidiaries have both the ability
      and  the   intention  of  holding   until   maturity  are   classified  as
      held-to-maturity  securities  and  reported at amortized  cost  (remaining
      principal net of unamortized premiums or discounts).  Investments that may
      be  sold  prior  to  maturity  to  support  the  subsidiaries'  investment
      strategy,  such  as in  response  to  changes  in  interest  rates  or tax
      deductibility of interest, are considered as available-for-sale securities
      and reported at fair value, with unrealized gains and losses excluded from
      earnings and reported in a separate  component  of  shareholders'  equity.
      Gains and losses  from  trading  securities  are  included  in income from
      operations.  The cost of  investments  sold is  determined on the specific
      cost identification basis.

      g) Translation of Foreign Currencies. Operations outside the United States
      are conducted through subsidiaries located in Canada, Germany, Ireland and
      the United  Kingdom.  Assets and  liabilities  of these  subsidiaries  are
      translated  at the rates of  exchange at the balance  sheet  dates,  while
      income and expense items are translated at the average  exchange rates for
      each period covered by the statement of income and retained earnings.  The
      resulting  translation  adjustments  are included in  accumulated  foreign
      currency  translation  adjustments,  a separate component of shareholders'
      equity.

      h) Derivative  Financial  Instruments.  To hedge its investment in foreign
      subsidiaries and to moderate its exposure to  interest-rate  fluctuations,
      the Company enters into various transactions  involving  off-balance-sheet
      financial instruments.  These transactions include options, currency swaps
      and forwards for foreign currency risk management and interest-rate  swaps
      and forward-rate agreements for interest rate exposure management.

      Gains or losses on foreign  currency  instruments  designated as hedges of
      the Company's net  investments in foreign  subsidiaries  are included with
      translation  adjustments in shareholders' equity. Gains or losses on these
      instruments in excess of the amount needed to offset net investment losses
      or gains are  included in income.  The net amount of  interest  income and
      interest  expense on agreements  used to hedge  interest-rate  exposure is
      recognized  in interest  expense  over the lives of the  instruments.  The
      indices on derivatives used to hedge interest-rate exposure match an index
      corresponding to either a specific  long-term debt instrument or to a pool
      of short-term debt. The Company does not terminate these derivatives prior
      to maturity.  In the unlikely event of termination,  gain or loss would be
      reflected in the income  statement,  or deferred and  recognized  over the
      remaining life of the hedged instrument.

      The Company does not serve as a financial  intermediary to make markets in
      any  off-balance-sheet  financial  instruments  nor  does it hold or issue
      derivative financial instruments for trading purposes.

      i) Amortization  of  Intangible   Assets.   Excess  cost  applicable  to
      acquisitions  is  generally  amortized  on a  straight-line  basis over 20
      years.

      j) Earnings per Common Share. Basic earnings per common share are computed
      by deducting dividend  requirements on preferred stock of the Company from
      net income and dividing the  remainder by  weighted-average  common shares
      outstanding.  Diluted  earnings per common share are computed by deducting
      dividend  requirements on non-convertible  preferred stocks of the Company
      from net income and dividing  the  remainder  by  weighted-average  common
      shares outstanding  adjusted for all dilutive potential common shares that
      were outstanding during the period.

      k)  Cash  Equivalents.  The  Company  considers  all  highly  liquid  debt
      instruments  with  original  maturities of three months or less to be cash
      equivalents.



<PAGE>


      l) Computer  Software Costs.  The Company  capitalizes  costs of purchased
      software  or  software  developed  internally  when the  project is in the
      application  development  stage.  Costs  of  developed  software  that  is
      considered   to   be   in   the   preliminary   project   stage   or   the
      post-implementation  stage are  expensed as  incurred.  Costs  incurred in
      conjunction with Year 2000 remediation are expensed as incurred.

3.    DIVESTITURE OF CANADA AND GERMANY

      As part of a number of strategic  initiatives  to enhance growth and build
      shareholder  value, the Company recently  announced its intent to sell its
      Canadian  consumer  finance  subsidiary  and its German  consumer  banking
      subsidiary.  On February 10, 1998,  the Company  entered into a definitive
      agreement for the sale of its Canadian  operations and on March 2nd closed
      the transaction. The sale generated a net aftertax gain in excess of $100.
      The Company  anticipates the sale of its German subsidiary to occur in the
      near  term.  The sale is  expected  to  result  in a loss of  $27.8  after
      consideration of a $31.0 tax benefit,  primarily generated by the expected
      utilization of capital losses,  and has been accrued at December 31, 1997.
      As of December 31, 1997, the net assets subject to sale totaled $137.2 and
      were comprised of the following:
<TABLE>
<CAPTION>

                                      Canada          Germany             Total
<S>                                   <C>             <C>              <C>
        Net Finance Receivables.....  $775.1          $271.6           $1,046.7
        Other Assets................    14.7           129.5              144.2
                                      ------         -------           --------
          Total Assets.............    789.8           401.1            1,190.9
                                      ------         -------           --------
        Short-Term Debt............    344.2              --              344.2
        Long-Term Debt.............    308.8            32.5              341.3
        Deposits...................       --           277.6              277.6
        Other Liabilities..........     15.3            75.3               90.6
                                      ------         -------          ---------
          Total Liabilities..........  668.3           385.4            1,053.7
                                      ------         -------          ---------
        Net Assets................... $121.5         $  15.7          $   137.2
                                      ======         =======          =========
</TABLE>

      In 1997, the Canadian  operations  reported pretax earnings of $21.2 while
      the German operating pretax loss was $6.7.

      The Company had previously  announced its intent,  in December of 1994, to
      sell its German  subsidiary.  However,  in December  of 1995,  the Company
      announced  the  decision  to retain the  operation  because no  acceptable
      offers  were  received.  Since  negotiations  and  other  efforts  did not
      progress  as  anticipated  in the  original  loss  estimates,  the Company
      recorded  a $15.0,  or $0.28  per  share,  charge  in 1995 for  additional
      potential losses relating to a significant liquidating loan portfolio.


4.    PROVISION FOR RESTRUCTURING

      In  the   fourth   quarter   of   1995,   the   Company   implemented   an
      expense-reduction program, principally within its headquarters operations.
      The resulting  restructuring  charge  reduced net income by $5.9, or $0.11
      per share,  and was  largely  related to early  retirement  and  severance
      expenses corresponding to workforce reductions of 225.



<PAGE>


5.    FINANCE RECEIVABLES
<TABLE>
<CAPTION>

      Finance receivables at December 31 consisted of the following:
<S>                                                     <C>             <C>
                                                        1997            1996
                                                        ----            ----
       Receivables Owned:
          Real Estate Secured...............       $  5,905.3      $  5,931.7
          Personal Unsecured................          3,262.4         2,982.9
          Credit Cards......................          4,685.4         4,595.8
          Sales Finance Contracts...........            994.3           926.3
          Commercial........................            182.8            99.5
                                                    ---------       ---------
            Total Owned.....................         15,030.2        14,536.2
       Receivables Sold with Servicing Retained
             (all real estate secured)......          2,912.7         2,324.8
                                                    ---------       ---------
       Total Managed........................        $17,942.9       $16,861.0
                                                    =========       =========
</TABLE>

      Includes  receivables of $1,084.2 and $1,103.0 in 1997 and 1996,
      respectively,  relating to the Company's German and Canadian subsidiaries.

      Average receivables during the years ended December 31 were as follows:
                                                    1997              1996
<TABLE>
                                                    ----              ----
<S>                                                 <C>               <C>
       Average Receivables Owned............        $14,459.6         $13,520.8
       Average Receivables Sold With
           Servicing Retained...............          2,600.4           1,798.1
                                                    ---------         ---------
       Average Managed......................        $17,060.0         $15,318.9
                                                    =========         =========
</TABLE>

      From time to time, subsidiaries of the Company have sold home equity loans
      through  securitizations  and have retained  collection and administrative
      responsibilities as servicer for the trust holding the home equity loans.

      Scheduled  contractual  maturities  of  finance  receivables  owned  to be
      received after December 31, 1997, are as follows:
<TABLE>
<CAPTION>

<S>                             <C>        <C>        <C>       <C>      <C>
                                1998       1999       2000      2001     Beyond
                                ----       ----       ----      ----     ------
       Real Estate Secured...... 18%        12%        12%       13%         45%
       Personal Unsecured....... 43         32         17         4           4
       Credit Cards............. 43          7          7         6          37
       Sales Finance Contracts.. 72         20          6         1           1
       Commercial............... 25         20         13         8          34
       Overall.................. 35%        16%        11%        8%         30%
</TABLE>

      While  the  statutes  of  several  states  place no  maximum  limit on the
      contractual term of closed-end loans secured by real estate,  the consumer
      finance subsidiaries generally limit loans of this type to periods ranging
      from 60 to 180  months.  Terms of  closed-end  unsecured  loans  and sales
      finance  contracts  generally do not exceed 60 months. It is the Company's
      experience  that a  substantial  portion of all  consumer  receivables  is
      renewed or repaid prior to contractual  maturity dates.  Accordingly,  the
      previous  tabulation  should  not be viewed as a forecast  of future  cash
      collections.  During the years  ended  December  31,  1997 and 1996,  cash
      collections  totaled  $11,505.2  and $8,954.0,  respectively.  The monthly
      collections of cash principal as a percentage of average  receivables were
      6.66% in 1997 and 5.51% in 1996.



<PAGE>



6.    ALLOWANCE FOR CREDIT LOSSES

      Changes in the allowance for credit losses were as follows:
<TABLE>
<CAPTION>

<S>                                                         <C>            <C>
                                                            1997           1996
                                                            ----           ----
       Balance at Beginning of Year..................    $ 498.2        $ 406.1
       Accounts Charged Off..........................     (468.2)        (363.3)
       Recoveries on Accounts Previously Charged Off.       56.0           46.4
       Provision for Credit Losses...................      485.3          398.8
       Other.........................................      (11.4)          10.2
                                                          -------        -------
       Balance at End of Year.........................    $ 559.9        $ 498.2
                                                          =======        =======
</TABLE>

      Year-end  balances  include $37.5 and $57.3 in 1997 and 1996,
      respectively,  relating to the Company's German and Canadian subsidiaries.


7.    INVESTMENT SECURITIES

      In the fourth  quarter of 1995,  the  Company  decided to exit its annuity
      business.  The actual  disposition of the annuity business and the capital
      gain from the sale of  corresponding  investments  increased net income by
      $8.4,  or $0.16  per  share,  in March  1996.  As of  December  31,  1997,
      shareholders' equity included a net unrealized gain of $5.2, consisting of
      an $8.0 net gain on the  Available-For-Sale  portfolio,  offset by $2.8 of
      applicable income taxes.

      Investments at December 31 were as follows:
<TABLE>
<CAPTION>
                                                      Gross        Gross    Est.
                                      Amortized  Unrealized   Unrealized  Market
        1997                               Cost       Gains       Losses   Value
        ----                          ---------  ----------   ----------  ------
        Available-For-Sale
        Debt Securities:
<S>                                      <C>           <C>          <C>   <C>
           Corporate...............      $294.7        $6.5         $1.1  $300.1
           Mortgage-backed.........        29.8          .9           --    30.7
           Municipal...............         5.2          .1           --     5.3
           U.S. Government.........       115.8         1.0           --   116.8
           Foreign Government......        59.8          .7           --    60.5
           Other...................         5.6          .1           --     5.5
                                         ------       -----        -----   -----
                                          510.9         9.2          1.2   518.9
        Equity Securities..........          .6          --           --      .6
                                         ------       -----        -----   -----
           Total...................      $511.5        $9.2         $1.2  $519.5
                                         ======        ====         ====  ======
        Held-To-Maturity
        Debt Securities:
           Corporate...............       $48.8        $ .4        $  .1   $49.1
           Mortgage-backed.........         2.2          --           --     2.2
           Municipal...............        10.8          .3           --    11.1
           U.S. Government.........        10.4          --           .1    10.3
           Foreign Government......         1.1          --           .1     1.0
           Other...................        10.2          --           --    10.2
                                          -----        ----          ---    ----
                 Total.............       $83.5        $ .7         $ .3   $83.9
                                          =====        ====         ====   =====

</TABLE>



<PAGE>
<TABLE>
<CAPTION>



                                                Gross          Gross        Est.
                             Amortized     Unrealized     Unrealized      Market
        1996                      Cost          Gains         Losses       Value
        ----                 ---------    -----------     ----------      ------
        Available-For-Sale
        Debt Securities
<S>                             <C>              <C>            <C>       <C>
           Corporate.........   $273.6           $5.3           $3.4      $275.5
           Mortgage-backed...     35.1            1.2             .2        36.1
           Municipal.........      7.3             .1             .1         7.3
           U.S. Government...     93.9             .6             .2        94.3
           Foreign Government.    42.4             .5             --        42.9
                                  ----           ----           ----        ----
                                 452.3            7.7            3.9       456.1
        Equity Securities....       .6             --             --          .6
                                  ----           ----           ----        ----
           Total.............   $452.9           $7.7           $3.9      $456.7
                                ======           ====           ====      ======
        Held-To-Maturity
        Debt Securities:
           Corporate..........   $48.9           $ .1          $  .7       $48.3
           Mortgage-backed....     2.6             --             .1         2.5
           Municipal..........     8.5             .2             --         8.7
           U.S. Government....    14.4             --             .2        14.2
           Foreign Government.     1.1             --             --         1.1
           Other..............    18.1             --             --        18.1
                                  ----            ---            ---        ----
                 Total........   $93.6           $ .3           $1.0       $92.9
                                 =====           ====           ====       =====
</TABLE>

      Included  in  investments  is  $263.2  and  $135.8,   in  1997  and  1996,
      respectively,  classified as trading  securities.  These amounts represent
      residual  interests in  securitized  receivables  resulting from the early
      payment of principal to certificate holders.

      The  contractual  maturities of debt  securities at December 31, 1997, are
      shown in the  table  that  follows.  Actual  maturities  may  differ  from
      contractual maturities because some borrowers may have the right to prepay
      obligations, with or without prepayment penalties.
<TABLE>
<CAPTION>

                                                Amortized          Estimated
                                                   Cost           Market Value
        1997
        Available-For-Sale
<S>                                               <C>                <C>
        Due within one year...............        $  29.1            $  29.1
        Due one through five years........          156.1              158.4
        Due five through ten years........          317.4              322.9
        Due after ten years...............            8.3                8.5
                                                   ------             ------
           Total..........................         $510.9             $518.9
                                                   ------             ------

        Held-To-Maturity
        Due within one year..............        $    7.3           $    7.3
        Due one through five years.......            47.3               47.5
        Due five through ten years.......            17.1               17.3
        Due after ten years..............            11.8               11.8
                                                  -------            -------
           Total.........................         $  83.5            $  83.9
                                                  =======            =======
</TABLE>

      Proceeds from sales of  Available-For-Sale  securities  totaled  $347.8 in
      1997,  compared  with  $1,508.5  in 1996.  Gross gains of $6.8 in 1997 and
      $27.5 in 1996,  and gross  losses  of $0.4 in 1997 and $1.6 in 1996,  were
      realized on those sales.



<PAGE>


8.    OTHER ASSETS
<TABLE>
<CAPTION>

       At December 31                              1997             1996
       --------------                              ----             ----
<S>                                           <C>               <C>
       Annuity Deposits...................... $   787.9         $   908.3
       Deferred Income Tax Benefits..........     302.7             232.3
       Excess Cost of Net Assets Acquired....      43.7              14.6
       Interest-Only Residual................      72.8              46.9
       Investments in and Advances to Discontinued
         Operations..............                   6.5              15.0
       Miscellaneous Accounts and Notes
         Receivable.........................       75.7              70.1
       Prepaid Expenses.....................      178.9             130.7
       Property Acquired by Foreclosure.....       85.5             100.2
       Recoverable Income Taxes.............       43.4              44.6
       Servicing Asset......................       11.4               8.0
       Unamortized Insurance Policy Acquisition
         Costs......................               33.2              36.0
       Other................................      183.7             115.9
                                               --------          --------
          Total.............................   $1,825.4          $1,722.6
                                               ========          ========
</TABLE>

      The activity in the servicing asset is summarized as follows:  balance
      January 1, 1997 - $8.0,  recognized  during the period - $6.9,
      amortization - $3.5, balance at December 31, 1997 - $11.4.

9.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>

       At December 31                               1997             1996
       --------------                               ----             ----
<S>                                               <C>              <C>
       Accounts Payable......................     $347.3           $191.5
       Accrued and Deferred Compensation.....       76.4             72.1
       Accrued Interest......................       81.0             69.5
       Accrued Postretirement Benefits.......       72.2             61.1
       Accrued Pension Cost..................       16.8             18.4
       Income Taxes Payable..................       46.1             42.0
       Insurance Premiums Payable............       27.7             32.2
       Other.................................       40.5             47.2
                                                  ------           ------
          Total..............................     $708.0           $534.0
                                                  ======           ======
</TABLE>

10.   SHORT-TERM DEBT

      Short-term  debt,   includes  $1,277.4  and  $916.9  relating  to  foreign
      subsidiaries at year-end 1997 and 1996, respectively,  of which $344.2 and
      $228.4 at year-end 1997 and 1996,  respectively,  relate to the German and
      Canadian subsidiaries. Short-term debt consisted of the following:
<TABLE>
<CAPTION>

       At December 31                                 1997              1996
       --------------                                 ----              ----
<S>                                               <C>               <C>
       Commercial Paper.......................... $3,770.5          $3,695.4
       Bank Borrowings...........................    814.6             473.9
                                                  --------          --------
          Total.................................  $4,585.1          $4,169.3
                                                  ========          ========
</TABLE>



<PAGE>


      Selected details of short-term borrowings are as follows:
<TABLE>
<CAPTION>

                                              1997          1996           1995
                                              ----          ----           ----
<S>                                        <C>           <C>            <C>
       Highest Aggregate at Any Month-End. $4,585.1      $4,571.3       $4,023.9
       Daily Average Amount...............  3,977.1       3,846.2        3,366.3
       Weighted Average Interest Rates:
          At Year-End:
             Commercial Paper.............     5.74%         5.38%         5.85%
             Bank Borrowings..............     7.48          6.17          6.71
                Overall...................     6.09          5.49          5.98
          Paid During Year*:
             Commercial Paper.............     5.52          5.52          6.24
             Bank Borrowings..............     6.89          6.46          7.19
                Overall...................     5.68%         5.63%         6.37%
</TABLE>

      *Weighted average interest rates paid during the year have been determined
      by relating  short-term interest costs (including the costs of maintaining
      lines of  credit)  for  each  year to the  daily  average  dollar  amounts
      outstanding.

      The Company maintains  committed revolving credit agreements in support of
      its  outstanding  commercial  paper. At December 31, 1997, the Company had
      lines of  credit of  $4,307.5,  of which  $3,850.7  was  unused.  The most
      significant  of these credit  agreements  has a net-worth  test of $1,000.
      Annual  commitment  fee  requirements  to support  availability  of credit
      agreements at the end of 1997,  1996 and 1995 totaled $3.9, $4.1 and $5.8,
      respectively.

      The impact of interest rate hedging  activities on the Company's  weighted
      average short-term borrowing rates and on the reported short-term interest
      expense were increases as follows: .08% and $3.1 in 1997; .13% and $5.1 in
      1996; and .05% and $1.7 in 1995.

11.   LONG-TERM DEBT
<TABLE>
<CAPTION>

       At December 31                               1997                1996
       --------------                               ----                ----
<S>                                             <C>                 <C>
          United States..............           $7,814.8            $7,832.2
          Canada.....................              308.8               338.6
          Germany....................               32.5                31.6
          United Kingdom.............              731.1               428.7
                                                --------            --------
             Total...................           $8,887.2            $8,631.1
                                                ========            ========
</TABLE>

      Long-term  debt,  including  weighted  average  interest  rates by year of
      maturity on debt  outstanding  at December 31, 1997, is shown below in the
      earliest year it could become payable:
<TABLE>
<CAPTION>

                               Average Rates
       Maturity                    1997                 1997                1996
       --------                -------------            ----                ----
<S>    <C>                          <C>             <C>                 <C>
       1997.................                                            $2,610.1
       1998.................         7.13%           $2,246.1            1,982.0
       1999.................         6.73             1,990.7            1,669.7
       2000.................         6.71             1,254.1              554.9
       2001..................        7.05               946.3              632.4
       2002..................        6.82             1,293.4              558.3
       2003-2007.............        6.77               959.3              426.4
       2008-2023.............        7.85               197.3              197.3
                                                    ---------          ---------
          Total..............        6.90%           $8,887.2           $8,631.1
                                                     ========           ========


</TABLE>

<PAGE>


      The weighted average annual interest rates on debt outstanding at year-end
      were  6.90%,  6.84%  and 7.24%  for  1997,  1996 and  1995,  respectively.
      Weighted average interest rates (including issuance costs) paid during the
      year on average long-term debt outstanding were 6.92%, 7.07% and 7.56% for
      years ended December 31, 1997, 1996 and 1995, respectively.

      Long-term  debt  outstanding  at  December  31,  1997 and  1996,  includes
      $4,174.6 and $3,815.7,  respectively,  of variable-rate debt that reprices
      based  on  various  indices.  Such  variable-rate  debt  generally  has an
      original maturity of one to two years.

      The impact of interest rate hedging  activities on the Company's  weighted
      average long-term  borrowing rates and on the reported  long-term interest
      expense were increases as follows: .02% and $2.0 in 1997; .06% and $4.8 in
      1996; and .05% and $3.7 in 1995.

12.   CAPITAL STOCK

      Shares of capital stock outstanding were as follows:
<TABLE>
<CAPTION>

      At December 31.......................   1997           1996         1995
      --------------                          ----           ----         ----
      5% Cumulative Preferred - $50 par value.
<S>                                      <C>             <C>           <C>
         Authorized, 585,730..............407,718(a      407,718(a     407,718(a

      $5.50  Dividend  Cumulative
         Convertible  Preferred  - no par
         value - $20 stated  value  (each
         share  convertible  into nine
         shares of  Common; maximum
         liquidation value, $1,653,800,
         $1,845,700, and $2,031,000).
         Authorized, 1,164,077
           Outstanding Shares Beginning of
               Year...................      18,457         20,310        22,362
           Conversion into Common.....      (1,919)        (1,853)       (2,052)
                                           --------       --------      --------
           Outstanding Shares End of Year   16,538         18,457        20,310
                                           --------       --------      --------

      $4.50 Dividend Cumulative Preferred
         - $100 par value.
         Authorized, 103,976.............   103,976        103,976       103,976
                                           --------       --------       -------

      $4.30 Dividend Cumulative Preferred
         - no par value -
         $100 stated value.
         Authorized, 1,069,204...........   836,585        836,585       836,585
                                           --------        -------       -------

      Common - $1 par value.  Authorized
          160,000,000
          Outstanding Shares Beginning
           of Year.................... 54,041,214     53,197,422      52,509,728
          Conversion of $5.50 Preferred
           into Common...............      17,271         16,677          18,468
          Exercise of Stock Options..     453,363        827,115         669,903
          Tendered Shares............     (29,510)           --            --
          Repurchased Shares.........  (1,205,000)           --            --
          Direct Investment Plan.....      13,271            --            --
          Transfer into Treasury from
            Treasury
            Shares Held as an Asset..          --            --            (677)
          Outstanding Shares End
             of Year................. 53,290,609(b   54,041,214(b   53,197,422(b
                                        ----------     ----------     ----------
          After deducting treasury shares:
              a)  5% Cumulative
                    Preferred........      178,012        178,012        178,012
              b)  Common.............    3,581,451      2,800,304      3,627,419

</TABLE>


<PAGE>


      In  addition,  the  Company  is  authorized  to issue  500,000  shares  of
      preferred  stock (no par value) and  2,500,000  shares of preferred  stock
      ($1.00 par value).  Included  within  such  shares are  570,000  shares of
      Series A Participating  Preferred Stock ($1.00 par value) that the Company
      is authorized to issue in connection  with Preferred Stock Purchase Rights
      (see Note 14).  None of these  authorized  preferred  shares are issued or
      outstanding.

      At  December  31,  1997,  a total of  148,842  shares of common  stock was
      reserved for conversion of $5.50 Dividend Cumulative Convertible Preferred
      Stock.  During the year,  17,271  shares of common  stock were issued upon
      conversion of the $5.50 Dividend Cumulative  Convertible  Preferred Stock,
      and 453,363 common stock treasury  shares were reissued in connection with
      the exercise of stock options.

13.   ADDITIONAL CAPITAL

      Additional  capital  decreased by $54.6 in 1997 and  increased by $35.3 in
      1996. The decrease in 1997 resulted from common stock repurchases of $78.8
      offset by  issuances in  connection  with  various  employee  stock plans,
      primarily the  non-qualified  stock option plan  described in Note 20. The
      increase in 1996 resulted from stock  issuances in connection with various
      employee stock plans.

14.   PREFERRED STOCK PURCHASE RIGHTS

      On August  22,  1996,  the Board of  Directors  of the  Company  adopted a
      Renewed Rights Agreement which became effective November 23, 1997. One new
      Preferred Stock Purchase Right (Right) was issued for each share of common
      stock,  par value $1.00 per share, of the Company  outstanding on November
      23, 1997, and a Right will be issued for each share of common stock issued
      thereafter.   Under  certain   circumstances,   each  Right  entitles  the
      registered  holder to purchase  from the Company  one  one-hundredth  of a
      share of the Company's  Series A Participating  Preferred Stock at a price
      of $235,  subject  to  adjustment.  Until the Rights  become  exercisable,
      expire or are  redeemed,  they will  automatically  trade  with the common
      stock but will at no time have voting power.

      The Rights will be exercisable  under  circumstances  generally  involving
      certain  acquisitions  of, or tender offers for, the common stock, or if a
      10% stockholder is declared an "Adverse Person" by the Board of Directors.
      If, at any time  after the Rights  become  exercisable,  but  before  they
      expire or are  redeemed,  the  Company  is  acquired  in a merger or other
      business  combination or sells 50% or more of its assets or earning power,
      the holder of a Right will be entitled to buy, at the  exercise  price,  a
      number of shares of Common Stock of the  acquiring  or  surviving  company
      having a market value of twice the exercise price of each Right.

      Generally, the Rights may be redeemed by the Company for $.01 per Right at
      any time prior to the expiration of the Rights on August 22, 2006, and the
      Company may alter the exercise price of the Rights and extend the duration
      of the Renewed Rights Agreement beyond its 10-year term.

      The Renewed Rights Agreement, which became effective on November 23, 1997,
      replaced  the  original  Rights  Agreement  adopted in 1987.  The original
      Rights  Agreement  was  substantially  identical  to  the  Renewed  Rights
      Agreement, except that (i) the exercise price per Preferred Stock Purchase
      Right was $87.50 per share,  subject to  adjustment;  (ii) the  redemption
      price was $.025 per Right; (iii) each Right entitled the registered holder
      to purchase from the Company one two-hundredth of a share of the Company's
      Series A Participating  Preferred Stock; and (iv) the amendment  provision
      did not permit the Company to alter the exercise price of the Rights or to
      extend the original Rights agreement beyond its 10-year term.



<PAGE>


15.   EMPLOYEE RETIREMENT PLANS

      The Company has a  non-contributory  defined  benefit  pension plan (Plan)
      covering  substantially  all employees of the Company and its subsidiaries
      in the United  States.  The benefits  provided are based on the employee's
      age,  years of service and average  compensation  during the highest three
      consecutive years of earnings.  The Company has made annual  contributions
      at least equal to the amounts accrued for retirement expense.  Plan assets
      are invested primarily in equity securities and corporate bonds.

      The  Company  also has a  supplemental  retirement  plan to restore  those
      benefits  which have been earned  under the Plan but which are not payable
      to participants because of the limits imposed by the Internal Revenue Code
      on qualified plan benefit distributions.

      Employees of  subsidiaries  outside the United  States  generally  receive
      retirement benefits from  Company-sponsored  plans or from statutory plans
      administered by governmental agencies in other countries.

      In  addition,   the  Company  funds  two  401(k)  savings   plans,   which
      collectively  cover  substantially  all  employees  of the Company and its
      subsidiaries  in the United States,  under which basic  contributions  are
      made annually up to 2.5% of each eligible  employee's annual  compensation
      up to $0.15.  Related costs charged to income for the years ended December
      31, 1997, 1996 and 1995, were $5.4, $4.8 and $4.6, respectively.

      The Plan's funded status and amounts  recognized in the Company's  balance
      sheet are as follows:
<TABLE>
<CAPTION>

      At December 31                                         1997           1996
      --------------                                         ----           ----
      Actuarial Present Value of Benefit Obligation:
<S>                                                        <C>            <C>
         Vested Benefits............................       $ 51.5         $ 45.4
         Non-Vested Benefits........................         12.5           15.0
                                                          -------        -------
      Accumulated Benefit Obligation................         64.0           60.4
      Effect of Future Salary Increases.............         48.8           43.5
                                                          -------        -------
      Projected Benefit Obligation..................        112.8          103.9
      Less Plan Assets at Fair Value................         78.9           65.0
                                                          -------        -------
      Projected Benefit Obligation in Excess of Plan
        Assets.....................                          33.9           38.9
      Less Unrecognized Net Loss....................         17.1           20.5
                                                          -------        -------
      Accrued Pension Cost Included in Accounts Payable
       and Accrued Liabilities......................       $ 16.8         $ 18.4
                                                           ======         ======
</TABLE>

      For 1997, the projected benefit obligation was determined using an assumed
      discount rate of 7.00% (compared with 7.50% in 1996), an assumed long-term
      rate of  return  on assets of  9.00%,  and an  assumed  long-term  rate of
      increase in future compensation levels of 4.50%.

      The following  table details the components of net pension expense for the
      Plan:
<TABLE>
<CAPTION>

                                                      1997       1996      1995
                                                      ----       ----      ----
<S>                                                  <C>        <C>       <C>
      Service Cost - Benefits Earned During Period...$ 5.5      $ 5.4     $ 4.4
      Interest Cost on Projected Benefit Obligation..  7.3        7.6       7.6
      Actual Return on Plan Assets...................(13.3)      (7.1)    (12.3)
      Net Amortization and Deferral..................  7.9        1.6       7.1
                                                     -----       -----    -----
      Net Periodic Pension Cost..................... $ 7.4       $ 7.5    $ 6.8
                                                     =====       =====    =====
</TABLE>

      Pension  expense  related to the Company's  supplemental  pension plan was
      $1.3, $1.3 and $1.2 in 1997, 1996 and 1995, respectively.  Pension expense
      for the Company's  subsidiaries  outside the United States was $2.8,  $2.7
      and $2.6 for 1997, 1996 and 1995, respectively.



<PAGE>


16.   POSTRETIREMENT BENEFITS

      The Company  provides  postretirement  health and dental care  benefits to
      eligible  employees  in the United  States,  along with their  spouses and
      eligible dependents.  Employees become eligible for these benefits if they
      meet minimum age and service  requirements and if they agree to contribute
      a portion of the cost.  The  associated  plans are unfunded,  and approved
      claims are paid from  Company  funds.  Under the terms of the  plans,  the
      Company  reserves  the  right to  modify  or  terminate  the  plans.  Most
      employees  outside the United States are covered by government health care
      programs. The cost of such programs is not significant to the Company.

      The  cost to the  Company  of  postretirement  benefits  consisted  of the
      following components:
<TABLE>
<CAPTION>

      At December 31                        1997           1996            1995
      --------------                        ----           ----            ----
      Postretirement Benefit Cost:
         Service Cost - benefits
          attributable to service
<S>                                         <C>             <C>            <C>
           during the year...               $2.0            $2.0           $1.5
         Interest Cost on Accumulated
          Benefit Obligation............     4.2             4.1            4.2
         Amortization of Deferred Gain..    (0.8)           (0.3)          (0.8)
                                            ----            ----           ----
            Total.......................    $5.4            $5.8           $4.9
                                            ====            ====           ====
</TABLE>

      The actuarial and recorded liabilities for these benefits were as follows:
<TABLE>
<CAPTION>

      At December 31                                        1997           1996
      --------------                                        ----           ----
      Accumulated Postretirement Benefit Obligation:
<S>                                                        <C>            <C>
         Retirees....................................      $45.1          $38.8
         Fully Eligible Active Plan Participants.....       12.4           10.3
         Other Active Plan Participants..............       14.7           12.0
                                                           -----          -----
            Total....................................      $72.2          $61.1
                                                           =====          =====
</TABLE>

      For measurement  purposes, a 10.2% pre-65 trend rate was used for 1997 and
      1996,  with an ultimate rate of 5.0% in 2013. In addition,  a 9.7% post-64
      trend rate was used for 1997 and 1996,  with an  ultimate  rate of 5.0% in
      2018.  For dental costs,  a trend rate of 6.0% was used for 1997 and 1996,
      with an  ultimate  rate of 4.0% in 2001.  The  discount  rate was 7.00% at
      December 31, 1997, and 7.50% at December 31, 1996. A  one-percentage-point
      increase  in  the  health  care  trend  rate  would  have   increased  the
      accumulated postretirement benefit obligation by $3.9 at year-end 1997 and
      would have added $.6 to the benefit cost for the year.

17.   INCOME TAXES

      The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>

                                         1997            1996          1995
                                         ----            ----          ----
      Federal:
         Current:
<S>                                    <C>            <C>             <C>
            U.S.....................   $153.5         $177.0          $124.1
            Foreign.................     17.4           16.0            18.4
                                       ------         ------          ------
               Total................    170.9          193.0           142.5
                                       ------         ------          ------
         Deferred:
            U.S.....................    (71.3)         (32.8)          (34.2)
            Foreign.................     (0.2)           0.3            (0.8)
                                       ------         ------          ------
               Total................    (71.5)         (32.5)          (35.0)
      State and Local...............     20.2           17.0            12.4
                                       ------         ------          ------
            Total Provision for
               Income Taxes.........   $119.6         $177.5          $119.9
                                       ======         ======          ======

</TABLE>


<PAGE>


      Temporary   differences   that  gave  rise  to  deferred  tax  assets  and
      liabilities were as follows:
<TABLE>
<CAPTION>

      At December 31                                   1997                1996
      --------------                                   ----                ----
      Deferred Tax Assets:
<S>                                                   <C>                 <C>
         Allowance for Credit Losses............      $187.2              $163.9
         Capital Losses - Germany...............        33.0                --
         Retiree Benefit Plans..................        31.5                29.8
         Accrued and Deferred Compensation......        19.4                19.2
         Deferred Commission Income.............        12.8                10.4
         Insurance Reserves.....................        10.1                 3.3
         Foreign Tax Credits*...................         1.3                 8.0
         All Other...............................       73.0                64.2
                                                      ------              ------
            Subtotal.............................      368.3               298.8
                                                      ======              ======
      Deferred Tax Liabilities:
         Real Estate Partnership Losses..........       27.4                23.7
         Deferred Acquisition Costs..............       17.8                15.7
         All Other...............................       17.1                19.1
                                                      ------              ------
            Subtotal.............................       62.3                58.5
                                                      ------              ------
      Valuation Allowance*.......................      (3.3)               (8.0)
                                                      ------              ------
            Net Deferred Taxes....................    $302.7              $232.3
                                                      ======              ======
</TABLE>

      *Foreign  Tax Credits are fully  offset by  valuation  allowances  because
      utilization is uncertain. The tax credits expire over the next five years.

      A reconciliation  of the differences  between income taxes computed at the
      statutory U.S. income tax rate and the  consolidated  tax provisions is as
      follows:

<TABLE>
<CAPTION>
                                                  1997          1996        1995
                                                  ----          ----        ----
<S>                                               <C>          <C>         <C>
      Statutory U.S. Tax Rate...................  35.0%        35.0%       35.0%
      Increase (Decrease):
         Differential Due to Operations Outside
              U.S...............                   (.8)        (1.4)        4.0*
         State and Local Income Taxes...........   3.5          2.4         3.0
         Capital Losses - Germany...............  (7.7)         --          --
         Other..................................   2.0          2.7         2.3
                                                  ----         ----        ----
         Effective Tax Rate.....................  32.0%        38.7%       44.3%
                                                  ====         ====        ====
</TABLE>

      *Includes  3.2% in 1995  resulting  from the  non-deductibility  of credit
      losses at the German banking subsidiary.

      The foreign tax credit utilization resulted from the Company's election to
      modify the limitation calculation.  U.S. income taxes were not provided at
      December  31,  1997,  on  $19.0  of  undistributed   earnings  of  foreign
      subsidiaries,  which are  expected to be  permanently  invested in foreign
      countries,  and on  $77.8  of  undistributed  earnings  of life  insurance
      subsidiaries  accumulated  as  policyholders'  surplus  under  tax laws in
      effect prior to 1984. Should these amounts be distributed,  the additional
      income taxes payable would be approximately $1.0 and $27.2, respectively.

18.   OTHER REVENUE
<TABLE>
<CAPTION>

                                            1997            1996           1995
                                            ----            ----           ----
<S>                                      <C>             <C>             <C>
        Investment Income................$  56.6         $  80.2         $ 67.8
        Net Tax Service (RAL) Revenue....  105.7           140.9          (14.9)
        Securitization Revenue...........  237.8           192.3          123.6
        Other............................   60.7            46.3           54.4
                                            ----            ----           ----
          Total.......................... $460.8          $459.7         $230.9
                                          ======          ======         ======
</TABLE>

<TABLE>
<CAPTION>

19.   OTHER EXPENSES
<S>                                             <C>            <C>          <C>
                                                1997           1996         1995
                                                ----           ----         ----
      Collection Expense.................     $  27.4       $  20.4      $  16.4
      Data Processing Costs..............        57.8          42.1         35.6
      Depreciation.......................        38.8          40.8         40.0
      Insurance Commissions..............        19.9          18.5         21.7
      Licenses and Taxes.................        20.9          17.6         17.0
      Losses on Real Estate Foreclosures.        26.1          38.1         45.9
      Marketing..........................       111.9          77.1         58.2
      Occupancy..........................        80.7          78.1         75.8
      Origination Costs..................        18.0          29.1         26.7
      Postage............................        35.8          32.3         26.6
      Premium Amortization...............        33.4          35.2         25.3
      Printing...........................        23.3          27.6         22.6
      Professional Services..............        46.0          29.9         26.6
      Telecommunications.................        32.8          32.6         30.6
      Travel.............................        23.0          21.4         20.3
      Other..............................        81.5          65.6         52.3
                                               ------        ------       ------
         Total...........................      $677.3        $606.4       $541.6
                                               ======        ======       ======
</TABLE>

20.   STOCK OPTIONS

      The Company has a non-qualified  stock option plan  (Non-Qualified  Plan),
      adopted  in 1990,  which  provides  for  grants of  options  to  officers,
      directors  and  key  employees  of  the  Company  and  its   participating
      subsidiaries.  Under the Non-Qualified Plan, the option price shall not be
      less than 100% of fair  market  value on the date the  option is  granted.
      Options  generally become  exercisable in cumulative  annual increments of
      25% each year,  commencing one year after date of grant and expiring after
      10 years.  The  aggregate  number of options for any calendar year may not
      exceed  1.75% of the total  issued  and  outstanding  common  stock of the
      Company as measured on the first day of any such calendar  year. If during
      any such  calendar  year the total  number of  authorized  options  is not
      granted,   the  remainder  will  be  available  for  granting  during  any
      succeeding  year  during  the term of the  Non-Qualified  Plan.  Shares of
      common stock to be issued upon exercise of options may be treasury  shares
      reacquired  by the Company or authorized  and unissued  common shares or a
      combination of both.

      The Company  adopted an equity  participation  plan  (Plan) in 1997,  that
      provides for grants of options to each eligible employee. It is the intent
      of the Plan that there be no overlap in  eligibility  between the Plan and
      the Non-Qualified  Plan. Under the Plan, the option price shall be 120% of
      the fair market value on the date the option is granted. Options are fully
      exercisable when granted and expire after 10 years.



<PAGE>


      The Company has adopted the  disclosure-only  provisions  of SFAS No. 123,
      "Accounting for Stock-Based  Compensation."  Accordingly,  no compensation
      cost has been  recognized  for the  Non-Qualified  Plan or the  Plan.  Had
      compensation cost for the  Non-Qualified  Plan or the Plan been determined
      based on the fair value at the grant date of awards in 1997, 1996 and 1995
      consistent with the provisions of SFAS No. 123, the Company's net earnings
      and earnings  per share would have been  reduced to the pro forma  amounts
      indicated below:
<TABLE>
<CAPTION>

                                                   1997         1996        1995
                                                   ----         ----        ----
<S>                                              <C>          <C>         <C>
        Net Income - Reported..................  $253.7       $281.0      $150.5
        Net Income - Pro Forma.................   248.9        278.8       150.3
        Basic Earnings per share:
           Reported............................    4.68         5.19        2.77
           Pro Forma...........................    4.59         5.15        2.77
        Diluted Earnings per share:
           Reported............................    4.54         5.05        2.71
           Pro Forma...........................    4.45         5.01        2.71
</TABLE>

      The fair value of each option grant is estimated on the date of grant
      using the Black-Scholes option-pricing model with the following weighted-
      average assumptions used for grants in 1997, 1996 and 1995, respectively:
      dividend yield of 3.07%,3.54% and 4.00%; risk-free interest rate of 5.82%,
      5.95% and 5.77%;  expected volatility of 26.3% and expected lives of 5.5
      for all years.  The pro forma effect on net income for 1997, 1996 and 1995
      is not representative  of the pro  forma  effect on net  income  in future
      years because it does not take into consideration pro forma compensation
      expense related to grants made prior to 1995.  The weighted  average fair
      value at the date of grant  for  options  granted  during  1997,  1996 and
      1995 was $16.06, $16.21 and $13.10 per option, respectively.

      The following table summarizes the activity relating to the Plan:

<TABLE>
<CAPTION>


                                                               Weighted-Average
                                                    Number      Exercise Price
      Shares Under Option
<S>                                               <C>               <C>
      Options Outstanding December 31, 1994..     3,634,566         $33.05
         Options Exercised...................      (669,903)         28.82
         Options Canceled....................      (132,425)         35.26
         Options Granted.....................       955,130          49.19
                                                 ----------        -------
      Options Outstanding December 31, 1995..     3,787,368          37.79
                                                  =========        =======

         Options Exercised...................      (827,115)         32.79
         Options Canceled....................       (68,056)         40.38
         Options Granted.....................     1,042,350          64.32
                                                  ---------        -------
      Options Outstanding December 31, 1996..     3,934,547          45.82
                                                  =========        =======

         Options Exercised...................      (453,363)         38.52
         Options Canceled....................      (485,088)         72.10
         Options Granted.....................     3,031,800          82.53
                                                  ---------         ------
      Options Outstanding December 31, 1997..     6,027,896         $62.72
                                                  =========         ======

      Options Exercisable December 31, 1997..     3,605,679         $60.92
                                                  =========         ======

</TABLE>


<PAGE>


The following table summarizes  information  about stock options  outstanding at
December 31, 1997:
<TABLE>
<CAPTION>

              Options Outstanding                     Options Exercisable
 -------------------------------------------------------------------------------
                                  Weighted-
                                    Average   Weighted-                Weighted-
                                  Remaining     Average                  Average
        Range of       Number   Contractual    Exercise        Number   Exercise
  Exercise Price  Outstanding          Life       Price   Exercisable      Price
  --------------  -----------  ------------   ---------   -----------  ---------
<S>        <C>         <C>          <C>          <C>           <C>        <C>
 $21.75 -  $22.44      42,477       3 years      $22.04        42,477     $22.04
  29.16 -   31.13     519,727     4.6 years       29.95       519,727      29.95
  37.44 -   38.78   1,053,375     6.5 years       37.70       862,737      37.76
  49.19 -   49.25     752,414       8 years       49.19       331,814      49.19
  61.81 -   64.44     965,313       9 years       64.32       254,834      63.98
  75.44 -   79.44   1,100,500      10 years       77.04             -          -
  81.00 -   90.53   1,594,090     9.6 years       86.54     1,594,090      86.54
  ---------------   ---------     ---------       -----     ---------      -----
  $21.75 - $90.53   6,027,896     8.4 years      $62.72     3,605,679     $60.92
  ===============   =========     =========      ======     =========     ======
</TABLE>

21.   DIVIDENDS PAID
<TABLE>
<CAPTION>

                                                  1997         1996        1995
                                                  ----         ----        ----
        Preferred Stock:
<S>        <C>                                <C>          <C>           <C>
           5%.............................    $    1.0     $    1.0      $  1.0
           $5.50 Convertible..............          .1           .1          .1
           $4.50..........................          .5           .5          .5
           $4.30..........................         3.6          3.6         3.6
                                                   ---          ---         ---
                                                   5.2          5.2         5.2
        Common Stock......................       115.5        105.3        94.5
                                                 -----        -----        ----
             Total Dividends..............      $120.7       $110.5       $99.7
                                                ======       ======       =====
</TABLE>

22.   GEOGRAPHIC INFORMATION

      Data by geographic  area for the years ended  December 31 are shown in the
following table:

<TABLE>
<CAPTION>
                                                              Inter-
                                     United                   Company
                                     States     Foreign   Eliminations     Total
      1997
<S>                                 <C>        <C>           <C>       <C>
      Revenue.......................$ 2,507.8  $  462.2      $(14.3)   $ 2,955.7
      Income before Income Taxes....    389.9     (16.6)         --        373.3
      Net Assets....................  1,380.5     391.8          --      1,772.3
      Total Assets.................. 14,339.9   3,396.9       (91.7)    17,645.1

      1996
      Revenue.......................  2,371.2     409.6        (8.9)     2,771.9
      Income before Income Taxes....    423.9      34.6          --        458.5
      Net Assets....................  1,398.6     296.2          --      1,694.8
      Total Assets.................. 14,410.0   2,589.7       (68.5)    16,931.2

      1995
      Revenue.......................  2,018.5     389.0        (9.3)     2,398.2
      Income before Income Taxes....    251.7      18.7          --        270.4
      Net Assets....................  1,250.0     253.0          --      1,503.0
      Total Assets.................. 13,572.3   2,219.2       (54.2)    15,737.3
</TABLE>

23.   EARNINGS PER SHARE
<TABLE>
<CAPTION>

                                                                      Per Share
                                                Income       Shares      Amount
        1997
<S>                                             <C>
        Net Income...........................   $253.7
           Less:  Preferred stock dividends..     (5.2)
                                              --------
        Basic Earnings per Share:
           Income available to common
<S>                                              <C>          <C>        <C>
             stockholders....................    248.5        53.0       $4.68
                                                 -----        ----       -----
           Convertible preferred stock.......      0.1        0.2
           Options...........................      --         1.2
           Employee stock purchase plan......      --         0.3
        Diluted Earnings per Share:
           Income available to common
             stockholders and assumed
                conversions..................   $248.6        54.7       $4.54
                                                ======        ====       =====

        1996
        Net Income...........................   $281.0
           Less:  Preferred stock dividends..     (5.2)
                                               --------
        Basic Earnings per Share:
           Income available to common
             stockholders....................    275.8        53.1       $5.19
                                                 -----        ----       -----
           Convertible preferred stock.......      0.1        0.2
           Options...........................      --         1.0
           Employee stock purchase plan......      --         0.3
        Diluted Earnings per Share:
           Income available to common
             stockholders and assumed
                conversions..................    $275.9        54.6       $5.05
                                                 ======        ====       =====

        1995
        Net Income...........................    $150.5
           Less:  Preferred stock dividends..      (5.2)
                                               ---------
        Basic Earnings per Share:
           Income available to common
             stockholders....................      145.3        52.5       $2.77
                                                   -----        ----       -----
           Convertible preferred stock.......        0.1        0.2
           Options...........................        --         0.7
           Employee stock purchase plan......        --         0.3
        Diluted Earnings per Share:
           Income available to common
             stockholders and assumed
                conversions..................     $145.4        53.7       $2.71
                                                  ======        ====       =====
</TABLE>

24.   DERIVATIVE FINANCIAL INSTRUMENTS

      The Company  enters into  foreign  exchange  forward  agreements,  options
      and currency  swaps to hedge its net investment in foreign  subsidiaries.
      The forward   agreements  do  not  subject  the  Company  to  risk  caused
      by exchange-rate  movements  because  gains and  losses  on these
      agreements offset losses and gains on the assets and liabilities being
      hedged. The forward  agreements  generally have  maturities that do not
      exceed six months.



<PAGE>


      Outstanding  forward  agreements  as of December 31, 1997,  consisted of a
      sale of (pound)46.0 in exchange for US$71.6 and a net forward  purchase of
      DM17.0  in  exchange  for  US$9.6.  This  compares  to  forward  sales  of
      (pound)46.0 and DM38.0 in exchange for US$71.6 and US$24.7,  respectively,
      at December 31, 1996.

      The   Company   sells   at-the-money   (spot)   call   options   and  buys
      out-of-the-money  (spot) put options on British pounds. The strike rate of
      each call option is set at the then-current  exchange rate, and the strike
      rate of each put option  purchased  is set at a rate  whereby  the premium
      received on the related call option  exactly  offsets the premium paid for
      such  put  option,  resulting  in  no  out-of-the-pocket  cost.  With  the
      exception  of the  strike  rates,  all  terms  of the  call  and  put  are
      identical.  The  notional  amount of each  option  is an amount  that will
      generally produce offsetting gains or losses (on an aftertax basis) to the
      gains or losses  produced by the underlying net investment.  Further,  the
      combination  of  these  instruments  (a  so-called  "no cost  collar")  is
      effectively  a partial  hedge,  as hedging gains or losses occur only when
      the spot rates fluctuate outside the range of the respective strike rates.
      These  option  transactions  generally  have a  maturity  of  three to six
      months.

      At December 31, 1997, the Company had purchased options to deliver British
      pounds in exchange for US$386.3,  as compared with December 31, 1996, when
      the  Company  owned the right to  deliver  British  pounds  for  US$166.0.
      Concurrently,  the  Company  had sold  options to buy  British  pounds for
      US$391.2 at December 31, 1997,  as compared  with sales of call options on
      British pounds for US$166.3 at year-end 1996.

      Through  the  use of  currency  swaps,  the  Company  exchanges  principal
      denominated  in  U.S.  dollars  for  principal  denominated  in a  foreign
      currency at the then-current exchange rate and agrees to make the opposite
      exchanges on the swaps'  termination date.  Semi-annual  interest payments
      are made on the notional amounts over the life of the agreements.

      Currency swaps  outstanding at year-end obligate the Company to pay DM47.0
      in exchange for US$31.1 in September  1998, to pay C$165.0 in exchange for
      US$120.4  in July 1999 and to pay  C$100.0  in  exchange  for  US$74.5  in
      November  2000.  There has been no change in  currency  swaps  outstanding
      since December 31, 1996.

      The Company recorded unrealized pretax gains of $6.0 at December 31, 1997,
      and  unrealized  pretax  losses of $18.5 at  December  31,  1996,  on open
      hedges. These gains and losses represent a mark to spot on all open hedges
      and are recognized in a separate component of equity.

      There were no gains or losses recognized in net income attributable to the
      above  hedging  programs  during the three years ended  December 31, 1997.
      Gains and losses in excess of the amount  needed to offset gains or losses
      on investments in foreign  subsidiaries  due to currency  fluctuations are
      not expected given the above hedging strategy.

      The Company and its  subsidiaries  utilize  interest  rate swaps to manage
      interest rate risk. The agreements  effectively  changed interest rates on
      certain medium-term notes and other indebtedness issued by the Company and
      its  subsidiaries to variable  commercial  paper or LIBOR indices or fixed
      rate,  with interest  received  exactly  offsetting  interest paid on such
      medium-term  notes or other  indebtedness.  The risks inherent in interest
      rate swaps are the potential inability of a counterparty to meet the terms
      of each  contract.  These  agreements to exchange  fixed and floating,  or
      floating   versus   floating,   interest  rate  payments  are  with  major
      international  financial  institutions  that are expected to fully perform
      under the terms of the agreements, thereby mitigating credit risk from the
      transactions.



<PAGE>


      The amounts to be paid or  received  under the  agreements  are accrued in
      interest expense consistent with the terms of the agreements.  At December
      31, 1997,  accrued  interest  payable related to these interest rate swaps
      totaled $12.0,  which is offset by $12.8 of accrued  interest  receivable.
      The impacts of the  interest  rate  hedging  activities  on the  Company's
      weighted average borrowing rates and on the reported interest expense were
      increases as follows:  .04% and $5.1 in 1997;  .08% and $9.9 in 1996;  and
      .05% and $5.4 in 1995.

      The following  table  summarizes the  interest-rate  swaps  outstanding at
      December 31, 1997:
<TABLE>
<CAPTION>

                                                Weighted Average       Weighted
                                  Notional       Interest Rates         Average
                                    Amount      Pay       Receive      Maturity*

      Pay fixed-rate - receive
<S>                             <C>            <C>         <C>           <C>
         floating-rate          $   732.5      7.40%       7.37%         2.6
      Pay floating-rate - receive
       fixed-rate
         Denominated in:
            US$                     153.0      6.13        6.51          8.4
            British pounds          141.0      7.89        7.94          1.5
      Pay floating-rate - receive
        floating-rate               853.2      6.09        5.75          1.4
                                 --------      ----        ----          ---
          Total                  $1,879.7      6.74%       6.61%         2.5
                                 ========      ====        ====          ===
</TABLE>

      *Remaining term in years.

25.   CONCENTRATIONS OF CREDIT RISK

      Concentrations  of credit  risk with  respect to finance  receivables  are
      limited  because the Company's  subsidiaries  primarily  lend to consumers
      across many different  geographic  areas. The highest  percentage of owned
      receivables in any geographic area is in California  (16%),  with no other
      state or  country  having  more than  13%.  About  65% of  receivables  in
      California are real estate  secured,  compared with 39% for the Company in
      total. Second mortgage loans are generally limited to 75% of the appraised
      value of the home as determined by certified,  independent appraisers.  In
      the case of first  mortgages,  the  lending  cap is 80%.  In  addition,  a
      rigorous  discipline  of credit  approval is enforced  regarding  borrower
      debt-to-income ratios and overall consumer credit quality.

      In meeting  the  financing  needs of its  customers,  subsidiaries  of the
      Company issue  commitments to extend  additional credit to customers under
      revolving  real estate  (including  loans  securitized),  credit cards and
      sales finance contracts as long as there is no violation of any conditions
      established  in  the  contract.   The  commitments  generally  have  fixed
      expiration  dates or  other  termination  clauses  and  generally  require
      payment  of a fee.  The  Company  uses the  same  credit  procedures  when
      entering  into  such  commitments  as  it  does  for  traditional  lending
      products.  At  December  31,  1997,  committed  lines  totaled  $20,627.2,
      compared with  $18,598.1 at year-end 1996, of which 56% at the end of 1997
      was available for further  loans.  A large  majority of these  commitments
      expire without being exercised. As a result, total contractual commitments
      do not represent future credit exposure or liquidity requirements.



<PAGE>


26.   LEASES

      The consumer  finance system operates from premises under leases generally
      having an  original  term of five years  with a renewal  option for a like
      term. The Company leases its headquarters in Wilmington, Delaware, under a
      lease  expiring in 2010.  Also, a subsidiary  leases an office  complex in
      Peapack,  New  Jersey,  with a primary  term  expiring in 2010 and renewal
      options  totaling 47 years.  Data  processing  equipment lease terms range
      from one to four years and are  generally  renewable.  The minimum  rental
      commitments  under  noncancelable  operating  leases at December 31, 1997,
      were as follows:
<TABLE>
<CAPTION>

<S>   <C>                                                                <C>
      1998.........................................................      $  72.8
      1999.........................................................         64.2
      2000.........................................................         53.9
      2001.........................................................         45.8
      2002.........................................................         41.3
      2003-2007....................................................        177.7
      2008-2021....................................................         88.2
                                                                          ------
         Total.....................................................       $543.9
                                                                          ======
</TABLE>

27.   FAIR VALUE OF FINANCIAL INSTRUMENTS

      The information  provided below is required by SFAS No. 107,  "Disclosures
      About  Fair  Value of  Financial  Instruments."  These  amounts  represent
      estimates  of fair  value  of  financial  instruments  at a point in time.
      Significant  estimates using available market  information and appropriate
      valuation methodologies were used for the purposes of this disclosure. The
      estimates are not necessarily  indicative of the amounts the Company could
      realize in a current  market  exchange,  and the use of  different  market
      assumptions or methodologies could have a material effect on the estimated
      fair value amounts.

<TABLE>
<CAPTION>

                                     1997                         1996
                                     ----                         ----
                             Carrying      Estimated     Carrying     Estimated
      At December 31           Value       Fair Value     Value      Fair Value
      --------------        ----------     ----------    ---------   ----------
      Assets
      ------
<S>                          <C>           <C>          <C>          <C>
      Cash and Equivalents.. $    253.9    $    253.9   $    279.6   $    279.6
      Investment Securities.      866.2         866.6        686.1        685.4
      Finance Receivables,
             Net............   14,470.3      15,646.2     14,038.0      15,090.9
      Servicing Asset.......       11.4          11.4          8.0           8.0
      Interest-Only Residual.      72.8          72.8         46.9          46.9

      Liabilities
      -----------
      Short-Term Debt........   4,585.1       4,585.1      4,169.3       4,169.3
      Deposits...............     555.3         555.3        635.0         635.0
      Long-Term Debt.........   8,887.2       9,033.2      8,631.1       8,812.6
      Accounts Payable.......     708.0         708.0        534.0         534.0

</TABLE>
                                                           December 31
                                                       1997           1996
      Net Unrealized Gain (Loss) on Derivative
          Financial Instruments..............         $10.1         $(33.9)

      The fair value of investment  securities is based on quoted market prices.
      The fair market value of real estate secured and personal  unsecured loans
      was  estimated  by  discounting  the future cash flows over the  estimated
      remaining term, based on past cash collection experience. For credit cards
      and sales finance products,  the carrying amount is a reasonable  estimate
      of  fair  value.  The  discount  factor  was  determined  by  taking  into
      consideration  current  funding costs,  chargeoff  experience and premiums
      paid on acquisitions of receivables with similar characteristics.

      Demand  deposits  are  shown at their  face  values.  For  short-term  and
      long-term  debt, the fair values are  estimated,  using the interest rates
      currently  offered for debt with similar terms and  remaining  maturities.
      The estimated fair value of accounts payable  approximates  their carrying
      value. The fair value of interest-rate  swap agreements,  forward exchange
      contracts and foreign exchange options is the estimated amount the Company
      would  receive or pay to terminate  the  agreements  at the balance  sheet
      date,  taking into account current interest rates,  foreign exchange rates
      and the creditworthiness of the counterparties.

      The fair value estimates presented were based on information  available to
      the Company at December 31, 1997 and 1996.  While  management is not aware
      of any  significant  factors that would affect the year-end  1997 estimate
      since  that  date,   current   estimates   of  fair  value  could   differ
      significantly from the amounts disclosed.

28.   CONTINGENT LIABILITIES

      In July 1992, the Internal Revenue Service (IRS) completed its examination
      of the Company's federal income tax returns for 1984 through 1987. The IRS
      proposed $142.0 in adjustments  relating to 1986 and 1987 additions to the
      loss  reserves of the Company's  former  subsidiary,  American  Centennial
      Insurance  Company  (ACIC),  prior  to the  Company's  sale of its  entire
      interest in ACIC in May 1987.

      In order  to  limit  the  further  accrual  of  interest  on the  proposed
      adjustments,  the Company paid $105.5 of tax and interest during the third
      quarter of 1992.

      The issues were not resolved during the  administrative  appeals  process,
      and  the IRS  issued  a  statutory  Notice  of  Deficiency  asserting  the
      unresolved  adjustments  and increased the  disallowance  to $195.0 in the
      third quarter of 1996.

      The Company has  initiated  litigation  in the United  States Tax Court to
      oppose the  disallowance.  While the  conclusion  of this matter cannot be
      predicted  with  certainty,  management  does not  anticipate the ultimate
      resolution to differ materially from amounts accrued.  Complete resolution
      is not expected to occur within one year.

      The Company and  subsidiaries  are  involved in various  other  claims and
      lawsuits incidental to the business.  In the opinion of management,  these
      claims and suits in the aggregate will not have a material  adverse effect
      on the Company's consolidated financial statements.



<PAGE>
<TABLE>
<CAPTION>


                   BENEFICIAL CORPORATION AND SUBSIDIARIES
                SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
                   (in millions, except per share amounts)

Quarter Ended                     3/31           6/30          9/30        12/31
-------------                     ----           ----          ----        -----
1997
<S>                              <C>            <C>          <C>          <C>
Gross Revenue................    $772.6         $734.0       $744.3       $704.8
Income (Loss) before Income
 Taxes......................      162.4          133.4        120.6       (43.1)
Net Income (Loss)...........      100.7           88.3         77.5       (12.8)
Diluted Earnings (Loss) per
 Common Share...............       1.80           1.59         1.40        (.25)
Dividends per Common Share..        .52            .52          .57          .57

1996
Gross Revenue...............     $751.1         $682.4       $678.8       $659.6
Income before Income Taxes..      184.7          139.6        109.5         24.7
Net Income..................      107.4           82.4         67.9         23.3
Diluted Earnings per Common
 Share......................       1.96           1.48         1.22          .39
Dividends per Common Share..        .47            .47          .52          .52


</TABLE>


<PAGE>


Item 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

         Not applicable.

                              PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS.

Executive Officers of the Registrant

Name                     Age       Position and Offices Held as of March 2, 1998
----                     ---       ---------------------------------------------

Finn M. W. Caspersen  .. 56                      Director  (1975  to   present),
                                                 Chairman  of  the  Board  of
                                                 Directors,    Chief   Executive
                                                 Officer    and    Chairman   of
                                                 Executive  Committee  (1976  to
                                                 present),  Member of  Executive
                                                 Committee  (1975  to  present),
                                                 and Member of Finance Committee
                                                 (1975   to   present)   of  the
                                                 Company.

David J.  Farris.......  62                      Director  (1982 to present),
                                                 Member of Office of the
                                                 President (1984 to present),
                                                 Chief Operating  Officer (1987
                                                 to present),
                                                 Member of  Executive  Committee
                                                 (1983 to present) and Member of
                                                 Finance   Committee   (1988  to
                                                 present)   of   the    Company;
                                                 President  and Chief  Executive
                                                 Officer  (1982 to  present)  of
                                                 Beneficial           Management
                                                 Corporation,  a  subsidiary  of
                                                 the Company.

James H. Gilliam, Jr.  .... 52                    Director (1984 to present),
                                                  Executive Vice President
                                                  (1989 to
                                                  present),  General  Counsel
                                                  (1986 to present),  Secretary
                                                  (1987 to 1992),  and Member of
                                                  Executive  Committee (1987 to
                                                  present) of the  Company;
                                                  Chairman  (1987  to  present)
                                                  of  Beneficial
                                                  National Bank, a subsidiary of
                                                  the Company.

Andrew C. Halvorsen  .....  51                    Director (1984 to present),
                                                  Member of Office of the
                                                  President,
                                                  First  Vice  President  and
                                                  Chief  Financial  Officer
                                                 (1986 to present) and Member of
                                                  Executive and Finance
                                                  Committees  (1984 to present)
                                                  of the Company.

Patti  Prairie  .........   46                    Chief  Information  Officer
                                                  (1997 to present) of the
                                                  Company; Executive  Vice
                                                  President  (1997  to  present)
                                                  of  Beneficial
                                                  Management   Corporation   and
                                                  President (1997 to present) of
                                                  Beneficial          Technology
                                                  Corporation,  subsidiaries  of
                                                  the  Company;    Senior   Vice
                                                  President of Global  Corporate
                                                  Systems  (1995  to  1997)  and
                                                  Senior  Vice    President   of
                                                  Corporate   Business   Systems
                                                  (1994  to  1995) of   American
                                                  Express Company;Vice President
                                                  of  Financial    Services   of
                                                 International Business Machines
                                                  Consulting  Group   (1992   to
                                                  1994).

Jonathan Macey  ........... 41                   Senior Vice President,
                                                 Controller and Chief Accounting
                                                 Officer
                                                 (1997 to present) of the
                                                 Company;  Vice  President -
                                                 Financial
                                                 Controls of Beneficial
                                                 Management Corporation,  a
                                                 subsidiary of the Company
                                                 (1992 to 1997).


<PAGE>



Scott A. Siebels  .......... 43                  Senior Vice President  (1998 to
                                                 present), Vice  President (1995
                                                 to  1997),  Secretary  (1995 to
                                                 present),  Assistant  General
                                                 Counsel (1998  to  present) and
                                                 Associate  Counsel  (1990 to
                                                 1997), Assistant Vice President
                                                 (1993 to 1995);  and Assistant
                                                 Secretary (1991 to 1995) of the
                                                 Company.

         Officers of the Company  hold office  until the next Annual  Meeting of
the Directors,  to be held May 21, 1998, or until their successors are otherwise
elected as provided in the By-Laws.

         Information   required  under  this  Item  relating  to  disclosure  of
delinquent filers pursuant to Item 405 of Regulation S-K and to the directors of
the Company will be  contained in the  Company's  Proxy  Statement  for the 1998
Annual Meeting of Stockholders, which is incorporated herein by reference.



<PAGE>


Item 11.  EXECUTIVE COMPENSATION.

         Information required under this Item will be contained in the Company's
Proxy  Statement  for  the  1998  Annual  Meeting  of  Stockholders,   which  is
incorporated herein by reference.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

         Information required under this Item will be contained in the Company's
Proxy  Statement  for  the  1998  Annual  Meeting  of  Stockholders,   which  is
incorporated herein by reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Information required under this Item will be contained in the Company's
Proxy  Statement  for  the  1998  Annual  Meeting  of  Stockholders,   which  is
incorporated herein by reference.




<PAGE>


                                 PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

The  following  represents  a listing  of all  financial  statements,  financial
statement schedules, and exhibits filed as part of this report.

         (1)  Financial Statements

              The following financial  statements of Beneficial  Corporation and
              Subsidiaries and Independent Auditors' Report are included in Item
              8:

                  Independent Auditors' Report.
                  Balance Sheet at December 31, 1997 and 1996.
                  Statement of Income and Retained  Earnings for the three years
                  ended December 31, 1997. Statement of Cash Flows for the three
                  years ended December 31, 1997.
                  Notes to Financial Statements.
                  Selected Quarterly Financial Data (unaudited).

         (2)  Financial Statement Schedules

              Schedule II Valuation and Qualifying Accounts and Reserves.

         (3)  Exhibits

              The Exhibit  Index on pages  58-60 of this  Annual  Report on Form
              10-K lists the exhibits that are filed as part of this report.


The Company filed the  following  reports on Form 8-K during the last quarter of
the period covered by this report:

         (1)  A report on Form 8-K,  dated October 27, 1997,  was filed relating
              to the Company's third-quarter  earnings,  which were announced on
              October 27, 1997,  and the Company's  announcement  of a number of
              initiatives  to  enhance  earnings  growth  and build  shareholder
              value.



<PAGE>


                             BENEFICIAL CORPORATION
                           SUPPLEMENTAL FINANCIAL DATA

         The  Financial   Statements  and  Notes  to  Financial   Statements  of
Beneficial  Corporation and  Subsidiaries are supplemented by the information in
the  following  Schedule  II. All other  schedules  are  omitted  because of the
absence of the conditions  under which they are required or because all material
information  called for is set forth in the Financial  Statements  and the Notes
referred to in this Item.
                                                                    SCHEDULE II
<TABLE>
<CAPTION>
                   VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                   Years Ended December 31, 1997, 1996, and 1995
                                 (in millions)

--------------------------------------------------------------------------------
       Column A              Column B         Column C      Column D    Column E
--------------------------   --------         --------      --------    --------
                                       -------------------------
                                              Additions
                                       -------------------------

                          Balance at   Charged to   Charged           Balance at
                          Beginning    Costs and    to Other                End
 Description              of Year      Expenses     Accounts Deductions  of Year
----------------------   -----------  ---------------------- ---------- --------
YEAR ENDED DECEMBER 31, 1997
Reserves shown separately:
   Insurance policy and
      claim reserves:
<S>                         <C>          <C>       <C>        <C>       <C>
         Policy reserves.   $1,200.9     $  --     $173.5(A)  $177.8(C) $1,065.5
                                                     51.9(I)   171.0(G)
                                                                12.0(H)
         Claim reserves..       66.1       71.1(D)    --        65.5(E)     71.7
                            --------     -------   -------    ------    --------
            Total.......    $1,267.0     $ 71.1     $225.4    $426.3    $1,137.2
                            ========     =======    ======    ======    ========
      Allowance for credit
        losses on
         finance
          receivables...    $  498.2     $485.3     $(11.4)   $412.2(F)$   559.9
                            ========     ======     =======   ======   =========

YEAR ENDED DECEMBER 31, 1996
Reserves shown separately:
      Insurance policy and
       claim reserves:
         Policy reserves.   $1,215.2     $  --      $212.2(A) $168.7(C) $1,200.9
                                                                49.0(G)
                                                                 8.8(H)
        Claim reserves...       50.3       82.8(D)      --      67.0(E)     66.1
                            --------      -------   ------    ------    --------
            Total........   $1,265.5     $  82.8    $212.2    $293.5    $1,267.0
                            ========      =======   ======    ======    ========
      Allowance for credit
        losses on
         finance
           receivables...  $   406.1      $398.8    $   10.2  $316.9(F)$   498.2
                           =========      ======    ========  ======   =========

YEAR ENDED DECEMBER 31, 1995
Reserves shown separately:
      Insurance policy and
       claim reserves:
         Policy reserves.   $1,041.5      $  --     $192.7(A) $152.7(C) $1,215.2
                                                     133.7(B)
         Claim reserves..       43.2        80.4(D)     --      73.3(E)     50.3
                            --------      -------   ------    ------    --------
            Total........   $1,084.7      $ 80.4    $326.4    $226.0    $1,265.5
                            ========      =======   ======    ======    ========
      Allowance for credit
        losses on
         finance
          receivables...    $  331.6      $295.2    $  3.7    $224.4(F)  $ 406.1
                            ========      ======    ======    ======     =======
</TABLE>
NOTES
(A) Net premiums written and reinsurance assumed.    (F) Finance receivables
(B) Premiums collected on annuity  contracts.            charged off (after
(C) Earned premiums.                                     offsetting recoveries).
(D) Provision for insurance  claims.                 (G) Change in annuity
(E) Claims paid.                                         policy reserve.
                                                     (H) Foreign  currency
                                                         translation.
                                                     (I) Adjustment for ordinary
                                                         co-insurance.



<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.
                             BENEFICIAL CORPORATION


Date:  March 26, 1998               By         /s/ Andrew C. Halvorsen
                                       -----------------------------------------
                                       Andrew C. Halvorsen, Member of the Office
                                       of the President, Chief Financial Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and the capacities and on the dates indicated.

      Signature                           Title                           Date

                                  Chairman of the Board of
                                 Directors and Chief Executive
                                 Officer and Director (Principal
     /s/ Finn M.W. Caspersen         Executive Officer)           March 26, 1998
-----------------------------------
        (Finn M.W. Caspersen)
                                  Member of the Office of the
                                    President, Chief Financial
                                       Officer and Director
     /s/ Andrew C. Halvorsen      (Principal Financial Officer)   March 26, 1998
------------------------------------
        (Andrew C. Halvorsen)
                                       Senior Vice President
                                       and Controller (Principal
     /s/ Jonathan Macey                  Accounting Officer)      March 26, 1998
-------------------------------------
        (Jonathan Macey)

     /s/ Robert J. Callander                  Director            March 26, 1998
--------------------------------------
        (Robert J. Callander)

     /s/ Robert C. Clark                       Director           March 26, 1998
--------------------------------------
        (Robert C. Clark)

     /s/ Leonard S. Coleman, Jr.               Director           March 26, 1998
--------------------------------------
        (Leonard S. Coleman, Jr.)

     /s/ David J. Farris                       Director           March 26, 1998
--------------------------------------
        (David J. Farris)

     /s/ James H. Gilliam, Jr.                 Director           March 26, 1998
--------------------------------------
        (James H. Gilliam, Jr.)

     /s/ Roland A. Hernandez                   Director           March 26, 1998
--------------------------------------
        (Roland A. Hernandez)

     /s/ J. Robert Hillier                     Director           March 26, 1998
--------------------------------------
        (J. Robert Hillier)

     /s/ Gerald L. Holm                        Director           March 26, 1998
--------------------------------------
        (Gerald L. Holm)

     /s/ Thomas H. Kean                        Director           March 26, 1998
--------------------------------------
        (Thomas H. Kean)

     /s/ Steven Muller                         Director           March 26, 1998
--------------------------------------
        (Steven Muller)

     /s/ Susan Julia Ross                      Director           March 26, 1998
--------------------------------------
        (Susan Julia Ross)

                                               Director           March 26, 1998
--------------------------------------
       (Robert A. Tucker)

                                               Director           March 26, 1998
--------------------------------------
       (Susan M. Wachter)

      /s/ Charles H. Watts, II                 Director           March 26, 1998
--------------------------------------
        (Charles H. Watts, II)


              Andrew C. Halvorsen,  pursuant to Powers of Attorney (executed by
each of the directors  listed above as signing)  filed with the  Securities  and
Exchange Commission,  does hereby sign and execute this report on behalf of such
directors.

                                          /s/ Andrew C. Halvorsen
                               ---------------------------------------------
                                              Andrew C. Halvorsen


March 26, 1998


<PAGE>






                                    EXHIBIT INDEX

  Exhibit
  Number                               Exhibit
   3.1          Copy of the Company's Restated Certificate of Incorporation, as
                amended.

   3.2          Copy of the Company's By-Laws, as amended.

   4.1          Amended and  Restated  Standard  Multiple-Series  Indenture
                Provisions (incorporated by reference to Exhibit 4.1 to the
                Company's Registration Statement on Form S-3 (Reg. No.
                33-38287)).

   4.2          First  Supplemental  and  Restated  Indenture  dated  as of
                December  1,  1990   between  the  Company  and  The  Chase
                Manhattan   Bank   (National   Association),   as   Trustee
                (incorporated  by reference to Exhibit 4.2 to the Company's
                Registration Statement on Form S-3 (Reg. No.
                33-51833)).

   4.3          A form of the Fixed  Rate  Medium-Term  Notes  (Global)
                (incorporated  by  reference  to Exhibit 4.7 to the Company's
                Registration Statement on Form S-3 (Reg. No. 33-51833)).

   4.4          A form of the Fixed Rate Medium-Term Notes  (Certificated)
                (incorporated by reference to Exhibit 4.8 to the Company's
                Registration Statement on Form S-3 (Reg. No. 33-51833)).

   4.5          A form of the Floating Rate  Medium-Term  Notes  (Global)
                (incorporated  by reference to
                Exhibit 4.9 to the Company's Registration Statement on Form S-3
                (Reg. No. 33-51833)).

   4.6          A form of the Floating Rate Medium-Term Notes  (Certificated)
                (incorporated by reference to Exhibit 4.10 to the Company's
                Registration Statement on Form S-3 (Reg. No. 33-51833)).

   4.7          Copy of Credit  Agreement  dated as of  November  15,  1995
                among  Beneficial  Corporation  as  a  borrower  and  as  a
                guarantor,  the borrowers defined in Article I, the lenders
                defined in Article  I, Bank of America  National  Trust and
                Savings  Association,  Chemical  Bank  and  Union  Bank  of
                Switzerland   as   co-arrangers,   and  Credit   Suisse  as
                administrative  agent  for  the  lenders  (incorporated  by
                reference  to Exhibit  10(t) to the  Annual  Report on Form
                10-K for the year ended December 31, 1995).

   10.1         Copies of forms of  agreement  by and  between  Beneficial
                Corporation  and  certain key management  employees of the
                Company and its  subsidiaries  (incorporated by reference to
                Exhibit 10(a) to the Quarterly Report on Form 10-Q for the
                period ended March 31, 1996).

   10.2         Copies  of forms of  Severance  Agreements  by and  between
                Beneficial  Corporation  and key executive  officers of the
                Company and its subsidiaries  (incorporated by reference to
                Exhibit 10(b) to the Quarterly  Report on Form 10-Q for the
                period ended March 31, 1996).

   10.3         Copy  of  Lease,  dated  as  of  June  28,  1982,  between
                Hamilton  Associates  Limited Partnership and Beneficial
                Management  Corporation  (incorporated by reference to Exhibit
                10(f) to the Annual Report on Form 10-K for the year ended
                December 31, 1982).

  Exhibit
  Number                                 Exhibit
   10.4         Copy of First  Amendment  to Lease dated as of July 2, 1997
                between  Hamilton  Associates Limited Partnership and Beneficial
                Management  Corporation  (incorporated by reference to
                Exhibit 10.1 to the  Quarterly  Report on Form 10-Q for the
                quarter  ended  September 30, 1997).

   10.5         Copy of  Guaranty  dated as of July 2,  1997 of  Beneficial
                Corporation  relating  to the Lease,  as  amended,  between
                Hamilton  Associates  Limited  Partnership  and  Beneficial
                Management   Corporation   (incorporated  by  reference  to
                Exhibit 10.2 to the  Quarterly  Report on Form 10-Q for the
                quarter ended September 30, 1997).

   10.6         Copy  of  Form  of  Indemnification  Agreement  between
                Beneficial  Corporation  and its directors,  dated
                August 21,  1986,  (incorporated  by reference to Exhibit  10(s)
                to the Annual Report on Form 10-K for the year ended
                December 31, 1986).

   10.7         Copy of  Amended  and  Restated  Directors'  Annuity  Plan
                dated  May 23,  1996  between  Beneficial   Corporation and  its
                directors  and  directors  emeriti  (incorporated  by reference
                to Exhibit 10 to the  Quarterly  Report on Form 10-Q for the
                quarter ended June 30, 1996).

   10.8         Copy of the Company's  Renewed Rights Agreement dated as of
                August 22, 1996 (incorporated by reference to Exhibit 10(a)
                of the Quarterly  Report on Form 10-Q for the quarter ended
                September 30, 1996).  The Renewed Rights  Agreement  became
                effective on November 23, 1997.

   10.9         Copy of Refund  Anticipation  Loan  Operations  Agreement dated
                July 19, 1996 among H & R Block Tax Services, Inc., HRB Royalty,
                Inc.,  Beneficial  Tax Masters Inc.,  Beneficial National Bank,
                and  Beneficial  Franchise  Company,  Inc.  (incorporated  by
                reference to Exhibit  10(b) to the Quarterly Report on Form 10-Q
                for the quarter ended  September 30, 1996).

   10.10        Copy of Refund  Anticipation Loan  Participation  Agreement
                dated  as  of  July  19,   1996   among   Block   Financial
                Corporation,  Beneficial  National Bank and  Beneficial Tax
                Masters,  Inc.  (incorporated by reference to Exhibit 10(c)
                to the Quarterly  Report on Form 10-Q for the quarter ended
                September  30,  1996).   Confidential  treatment  has  been
                requested   with   respect  to  certain   portions  of  the
                agreement;  such portions have been  separately  filed with
                the Securities and Exchange Commission.

   10.11        Copy of Beneficial  Corporation  Key Employees  Stock Bonus
                Plan, as amended,  (incorporated by reference to Exhibit 10
                to the Quarterly  Report on Form 10-Q for the quarter ended
                June 30, 1997).

   10.12        Copy of Beneficial Corporation 1990 Non-Qualified Stock
                Option Plan.

   10.13        Copy of Beneficial  Corporation  Supplemental  Pension Plan
                (incorporated  by reference to Exhibit  10(n) to the Annual
                Report on Form 10-K for the year ended December 31, 1992).

   10.14        Copy of Beneficial  Corporation Deferred  Compensation Plan
                (incorporated  by reference to Exhibit  10(r) to the Annual
                Report on Form 10-K for the year ended December 31, 1994).



  Exhibit
  Number                                Exhibit
   10.15         Copy of letter  agreement  entered  into by the Company and
                 MDE  Associates,   Inc.  relating  to  personal   financial
                 counseling  services  to be made  available  to certain key
                 officers of the Company and its subsidiaries  (incorporated
                 by reference to Exhibit  10(s) to the Annual Report on Form
                 10-K for the year ended December 31, 1995).

    12           Computation  of Ratios  of  Earnings  to Fixed  Charges  of
                 Beneficial Corporation  and Subsidiaries (continuing operations
                 only).

    21           List of the names and states of incorporation of the Company's
                 subsidiaries.

    23           Consent of independent auditors.

    24           Powers of Attorney.

    27           Financial Data Schedule (in EDGAR filing only).


The Company agrees to furnish to the Securities  and Exchange  Commission,  upon
request,  a copy of each  instrument  defining  the  rights  of  holders  of its
long-term debt where the  securities  authorized  thereunder  does not exceed 10
percent  of  the  total  assets  of  the  Company  and  its  subsidiaries  on  a
consolidated basis.

The Company will furnish to each  stockholder,  upon written request,  copies of
the  exhibits  referred  to  above.  Requests  should be  addressed  to Scott A.
Siebels, Senior Vice President and Corporate Secretary,  Beneficial Corporation,
301 North Walnut Street, Wilmington, Delaware 19801.



<PAGE>


























                                     EXHIBIT 3.1



<PAGE>


                                                              [Conformed Copy]
--------------------------------------------------------------------------------

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

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









                            RESTATED CERTIFICATE OF INCORPORATION

                                             of

                                     BENEFICIAL CORPORATION
                                    (A Delaware Corporation)









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










                               As amended through November 20, 1997







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

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

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



<PAGE>


                         RESTATED CERTIFICATE OF INCORPORATION
                                          of
                                 BENEFICIAL CORPORATION
                         -------------------------------------

     BENEFICIAL CORPORATION, a corporation organized and existing under the laws
of the State of Delaware, HEREBY CERTIFIES AS FOLLOWS:

      FIRST:  That (i) the name of the  corporation  is BENEFICIAL  CORPORATION,
(ii) the name  under  which the  corporation  was  originally  incorporated  was
"Beneficial  Industrial  Loan  Corporation",  and (iii) such  incorporation  was
effected  by the  filing  of an  Agreement  and Act of  Consolidation  with  the
Secretary of State on May 9, 1929.

      SECOND:  That this Restated  Certificate of Incorporation was duly adopted
by  vote  of the  directors  and  thereafter  by  vote  of the  stockholders  in
accordance  with  Section  245 of the  General  Corporation  Law of the State of
Delaware.

      THIRD:  That the text of the Certificate of Incorporation  as amended or
supplemented  heretofore is further amended hereby to read as herein set forth
in full.

                                  ARTICLE I

      The name of the Corporation is BENEFICIAL CORPORATION.

                                  ARTICLE II

      The  registered  office of the  Corporation  in the State of  Delaware  is
located  at One  Christina  Centre,  301  North  Walnut  Street,  P.O.  Box 911,
Wilmington,  County of New  Castle.  The name and  address of the  Corporation's
registered  agent is Southern Trust  Company,  One Christina  Centre,  301 North
Walnut Street, P.O. Box 911, Wilmington, Delaware 19899.

                                  ARTICLE III

      The purpose of the  Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.

                                  ARTICLE IV

      Section 1. The total  number of shares of all  classes of stock  which the
Corporation shall be authorized to issue is 165,922,987.

      Section 2. The Corporation  shall have authority to issue seven classes of
stock, in the total  authorized  amounts and with the par value per share and in
the aggregate as set forth below.
<TABLE>
<CAPTION>

                             Total Number of        Par Value      Aggregate
Class of Stock               Shares Authorized      Per Share      Par Value
--------------------------------------------------------------------------------

Preferred Stock without
<S>                               <C>              <C>              <C>
    nominal or par value          500,000           None            None
Preferred Stock with par value  2,500,000           $  1            $  2,500,000
5% Cumulative Preferred Stock     585,730           $ 50            $ 29,286,500
$4.50 Dividend Cumulative
    Preferred Stock               103,976           $100            $ 10,397,600
$4.30 Dividend Cumulative
    Preferred Stock             1,069,204           None            None
$5.50 Dividend Cumulative
    Convertible Preferred
      Stock                     1,164,077           None            None
Common Stock                  160,000,000            $ 1            $160,000,000

</TABLE>

<PAGE>


      Section 3. A statement of the designations and the powers, preferences and
rights  of  such  classes  of  stock  and  the  qualifications,  limitations  or
restrictions,  thereof, the fixing of which by this Certificate of Incorporation
is desired,  and the authority of the Board of Directors to fix by resolution or
resolutions the powers,  preferences and rights of such classes of stock and the
qualifications, limitations or restrictions thereof, which are not fixed hereby,
are as follows:

                       Preferred Stock Without Nominal or Par Value

      A. (1)  Shares of  Preferred  Stock  without  nominal  or par value may be
issued from time to time in one or more series.  The  preferences  and relative,
participating,  optional  and other  special  rights of each such series and the
qualifications,  limitations or  restrictions  thereof,  if any, may differ from
those  of any and all  other  series  already  outstanding;  and  the  Board  of
Directors of the Corporation is hereby  expressly  granted  authority to fix, by
resolution  or  resolutions  adopted  prior to the  issuance  of any shares of a
particular  series  of  Preferred  Stock  without  nominal  or  par  value,  the
designations,  preferences  and  relative,  participating,  optional  and  other
special rights, or the qualifications,  limitations or restrictions  thereof, of
such series, including but without limiting the generality of the foregoing, the
following:

         (i) The rate and times at which, and the terms and conditions on which,
      dividends  on the  Preferred  Stock  without  nominal or par value of such
      series shall be paid;

         (ii) The right,  if any, of holders of Preferred  Stock without nominal
      or par value of such series to convert the same into, or exchange the same
      for,  other  classes  of  stock  of the  Corporation  and  the  terms  and
      conditions of such conversion or exchange;

         (iii) The  redemption  price or prices  and the time at which,  and the
      terms and  conditions on which,  Preferred  Stock  without  nominal or par
      value of such series may be redeemed;

         (iv) The rights of the holders of Preferred  Stock  without  nominal or
      par value of such series upon the  voluntary or  involuntary  liquidation,
      distribution  or  sale  of  assets,  dissolution  or  winding  up  of  the
      Corporation  (which in no event  shall  entitle  any  holder to receive an
      amount per share  exceeding  105% of the  consideration  received for each
      share by the  Corporation  upon the original  issuance  thereof plus a sum
      equal to accrued and unpaid  dividends  thereon,  whether or not earned or
      declared); and

         (v) The terms of the sinking fund or redemption or purchase account, if
      any, to be provided for the Preferred  Stock without  nominal or par value
      of such series.

     (2) All shares of each series shall be identical in all  respects,  and all
shares of Preferred Stock without nominal or par value of all series shall be of
equal rank in respect of the preference as to dividends and to payments upon the
liquidation,  distribution or sale of assets,  dissolution and winding up of the
Corporation.  The rights of the Common Stock of the Corporation shall be subject
to the  preferences  and  relative,  participating,  optional and other  special
rights of the  Preferred  Stock  without  nominal or par value of each series as
fixed from time to time by the Board of Directors as aforesaid.

(3) (a) Except as otherwise  provided  herein and except as provided by statute,
the Preferred Stock without nominal or par value shall have no voting rights. In
case at any time three or more full semiannual dividends (whether consecutive or
not) on the Preferred  Stock  without  nominal or par value shall be in arrears,
then during the period  (hereinafter  in this  Section  3A(3)  called the Voting
Period)  commencing  with such time and ending with the time when all arrears in
dividends on the Preferred  Stock  without  nominal or par value shall have been
paid and the full dividend on the Preferred  Stock without  nominal or par value
for the then current  semiannual  dividend  period shall have been  declared and
paid or set  aside  for  payment,  at any  meeting  of the  stockholders  of the
Corporation held for the election of directors during the

<PAGE>


Voting  Period,  the holders of  Preferred  Stock  without  nominal or par value
present in person or represented by proxy at said meeting, shall be entitled, as
a class,  to the  exclusion of the holders of all other  classes of stock of the
Corporation, to elect two directors of the Corporation,  each share of Preferred
Stock without nominal or par value entitling the holder to one vote.

         (b) Any  director  who shall have been  elected by holders of Preferred
Stock  without  nominal  or par value or by any  director  so  elected as herein
contemplated,  may be removed at any time during a Voting Period,  either for or
without cause,  by, and only by, the affirmative  votes of the holders of record
of a majority of the  outstanding  shares of Preferred  Stock without nominal or
par  value  given at a  special  meeting  of such  stockholders  called  for the
purpose, and any vacancy thereby created may be filled during such Voting Period
by the holders of Preferred Stock without nominal or par value present in person
or represented by proxy at such meeting. Any director to be elected by the Board
of  Directors  of the  Corporation  to replace a director  elected by holders of
Preferred Stock without nominal or par value or elected by a director as in this
sentence provided shall be elected by the remaining director theretofore elected
by the holders of Preferred  Stock without  nominal or par value.  At the end of
the Voting Period the holders of Preferred  Stock  without  nominal or par value
shall be  automatically  divested of all voting  power vested in them under this
Section 3A(3) but subject always to the subsequent  vesting  hereunder of voting
power in the  holders of  Preferred  Stock  without  nominal or par value in the
event of any similar default or defaults thereafter

     (4) All  shares of  Preferred  Stock  without  nominal  or par value of all
series shall be of equal rank in respect of the  preference  as to dividends and
to payments upon the liquidation, distribution or sale of assets, dissolution or
winding up of the  Corporation  with all shares of the Preferred  Stock with par
value,  the  5%  Cumulative  Preferred  Stock,  the  $4.50  Dividend  Cumulative
Preferred  Stock,  the $4.30 Dividend  Cumulative  Preferred Stock and the $5.50
Dividend Cumulative Convertible Preferred Stock.

     (5) While any Preferred  Stock without  nominal or par value is outstanding
the  Corporation  shall not alter or change the  preferences,  special rights or
powers of the Preferred  Stock  without  nominal or par value so as to adversely
affect the Preferred  Stock without nominal or par value without the affirmative
consent  (given in writing or at a meeting duly called for that  purpose) of the
holders of at least  two-thirds  (2/3rds) of the  aggregate  number of shares of
Preferred Stock without nominal or par value then outstanding.


                         Preferred Stock with Par Value


      B.(1) Shares of Preferred  Stock with par value may be issued from time to
time in one or more series,  as may be determined from time to time by the Board
of Directors, each of said series to be distinctly designated. All shares of any
one series of Preferred Stock with par value shall be alike in every particular,
except that shares of any one series issued at different  times may differ as to
the  dates  from  which  dividends  thereon  shall be  cumulative.  The Board of
Directors  is hereby  authorized  to fix the  dividend  rights,  dividend  rate,
conversion  rights,  voting  rights,  rights and terms of redemption  (including
sinking  fund  provisions),  and the  redemption  price or prices of any  wholly
unissued  series  of  preferred  shares,  and any  other  powers,  designations,
preferences  and relative,  participating,  optional or other special  rights of
such series, and any qualifications,  limitations, or restrictions on any of the
rights of such series, and the number of shares constituting any such series and
the designation  thereof, or any of them, and to increase or decrease the number
of shares of any series  subsequent  to the issue of shares of that series,  but
not below the  number of shares of such  series  then  outstanding.  In case the
number of shares of any series shall be so  decreased,  the shares  constituting
such  decrease  shall  resume the status which they had prior to the adoption of
the resolution originally fixing the number of shares of such series.



<PAGE>


         (2) All shares of Preferred Stock with par value of all series shall be
of equal rank in respect of the  preference as to dividends and to payments upon
the  liquidation,  distribution or sale of assets,  dissolution or winding up of
the Corporation with all shares of Preferred Stock without nominal or par value,
the 5% Cumulative  Preferred  Stock,  the $4.50  Dividend  Cumulative  Preferred
Stock,  the $4.30  Dividend  Cumulative  Preferred  Stock and the $5.50 Dividend
Cumulative Convertible Preferred Stock.

         (3) The rights of the Common Stock of the Corporation  shall be subject
to the  preferences  and  relative,  participating,  optional and other  special
rights of the  Preferred  Stock with par value of each series as fixed from time
to time by the Board of Directors as aforesaid.

                          5% Cumulative Preferred Stock

      C.(1)  Dividends.  The  holders  of  5%  Cumulative  Preferred  Stock,  in
preference to the holders of Common Stock of the Corporation,  shall be entitled
to receive,  as and when  declared by the Board of  Directors,  dividends at the
rate of 5% per annum and no more,  payable on the last day of December 1957, and
semi-annually  thereafter  on the last days of June and  December  in each year.
Such  preferential  dividends  shall  accrue,  with  respect  to  shares  of  5%
Cumulative  Preferred  Stock issued prior to January 1, 1958,  from May 1, 1957,
and with  respect  to shares of such stock  issued on or after  January 1, 1958,
from the first day of the semi-annual dividend period in which such shares shall
be  issued,  and shall be  cumulative  so that if  dividends  in  respect of any
dividend  period  at the rate of 5% per  annum  shall not have been paid upon or
declared and set apart for the 5% Cumulative  Preferred  Stock,  the  deficiency
shall be fully paid or declared and set apart before any dividend  shall be paid
upon or declared or set apart for the Common  Stock.  Preferential  dividends on
the 5% Cumulative  Preferred  Stock shall be deemed to accrue from day to day. A
dividend period shall begin on the day following each dividend  payment date set
forth above and end on the next succeeding dividend payment date.

        (2) Liquidation,  Dissolution or Winding Up. The 5% Cumulative Preferred
Stock  shall be  preferred  as to assets over the Common  Stock,  so that in the
event of the voluntary or involuntary liquidation,  dissolution or winding up of
the Corporation  the holders of 5% Cumulative  Preferred Stock shall be entitled
to have set apart for them, or to be paid, out of the assets of the  Corporation
before any  distribution is made to or set apart for the holders of Common Stock
an amount in cash equal to and in no event more than $50.00 per share plus a sum
equal to accrued and unpaid dividend thereon, whether or not earned or declared.

        (3) Optional Redemption.

        (a) At the option of the Corporation, by vote of the Board of Directors,
the 5% Cumulative  Preferred  Stock may be redeemed as a whole or in part at any
time or from time to time at a redemption price equal to $50.00 per share,  plus
an amount  equal to accrued and unpaid  dividends  thereon to the date fixed for
redemption,  whether or not earned or declared, and no more. If less than all of
the outstanding  shares of 5% Cumulative  Preferred Stock are to be redeemed the
shares to be  redeemed  shall be  determined  by lot in such  usual  manner  and
subject to such  regulations  as the Board of Directors  in its sole  discretion
shall prescribe.

        (b) At least  30 days  prior to the date  fixed  for the  redemption  of
shares of the 5% Cumulative  Preferred Stock a written notice shall be mailed to
each holder of record of shares of 5% Cumulative  Preferred Stock to be redeemed
in a postage  prepaid  envelope  addressed  to such  holder  at his post  office
address as shown on the records of the Corporation, notifying such holder of the
election of the  Corporation  to redeem such shares,  stating the date fixed for
redemption thereof (hereinafter referred to as the redemption date), and calling
upon such holder to surrender to the  Corporation on the redemption  date at the
place designated in such notice his certificate or certificates representing the
number of shares specified in such notice of redemption.

        (c) On or  after  the  redemption  date  each  holder  of  shares  of 5%
Cumulative  Preferred  Stock to be  redeemed  shall  present and  surrender  his
certificate  or  certificates  for such shares to the  Corporation  at the place
designated  in such notice and  thereupon  the  redemption  price of such shares
shall be paid to or on the  order  of the  person  whose  name  appears  on such
certificate  or  certificates   as  the  owner  thereof  and  each   surrendered
certificate shall be canceled.

        (d) In case less than all the shares represented by any such certificate
are  redeemed a new  certificate  shall be issued  representing  the  unredeemed
shares.

        (e) From and after the redemption  date (unless default shall be made by
the Corporation in payment of the redemption  price) all dividends on the shares
of 5% Cumulative  Preferred Stock designated for redemption in such notice shall
cease to accrue,  and all rights of the holders  thereof as  stockholders of the
Corporation,  except the right to receive the redemption  price thereof upon the
surrender of certificates  representing  the same, shall cease and determine and
such shares shall not thereafter be transferred  (except with the consent of the
Corporation)  on the  books of the  Corporation,  and such  shares  shall not be
deemed to be outstanding for any purpose whatsoever.

        (f) At its election the  Corporation  prior to the  redemption  date may
deposit the redemption  price of the shares of 5% Cumulative  Preferred Stock so
called for  redemption  in trust for the  holders  thereof  with a bank or trust
company  (having a capital and surplus of not less than  $1,000,000) in the City
of  Wilmington,  Delaware or in the Borough of Manhattan,  City and State of New
York or in any other city in which the  Corporation at the time shall maintain a
transfer agency with respect to such stock, in which case such redemption notice
shall state the date of such  deposit,  shall specify the office of such bank or
trust company as the place of payment of the  redemption  price,  and shall call
upon such holders to surrender the certificates representing such shares at such
place on or after the date fixed in such  redemption  notice (which shall not be
later than the redemption  date) against payment of the redemption  price.  From
and after the  making of such  deposit,  the shares of 5%  Cumulative  Preferred
Stock so designated for redemption shall not be deemed to be outstanding for any
purpose  whatsoever,  and the  rights of the  holders  of such  shares  shall be
limited to the right to receive the  redemption  price of such  shares,  without
interest,  upon  surrender  of the  certificates  representing  the  same to the
Corporation at said office of such bank or trust company.

        (g) Any moneys so deposited which shall remain  unclaimed by the holders
of  such  5%  Cumulative  Preferred  Stock  at the end of six  years  after  the
redemption  date  shall  be  returned  by such  bank  or  trust  company  to the
Corporation  after which the holders of the 5% Cumulative  Preferred Stock shall
have no further interest in such moneys.

        (4) Voting Rights.

        (a)  Except as  otherwise  provided  herein and  except as  provided  by
statute,  the 5% Cumulative Preferred Stock shall have no voting rights. In case
at any time three or more full  semi-annual  dividends  (whether  consecutive or
not) on the 5% Cumulative  Preferred Stock shall be in arrears,  then during the
period  (hereinafter in this Section 3C(4) called the Voting Period)  commencing
with such time and ending with the time when all arrears in  dividends on the 5%
Cumulative  Preferred Stock shall have been paid and the full dividend on the 5%
Cumulative  Preferred  Stock for the then current  semi-annual  dividend  period
shall have been  declared and paid or set aside for  payment,  at any meeting of
the  stockholders of the Corporation  held for the election of directors  during
the Voting  Period,  the holders of 5%  Cumulative  Preferred  Stock  present in
person or represented by proxy at said meeting shall be entitled, as a class, to
the exclusion of the holders of all other  classes of stock of the  Corporation,
to elect two directors of the Corporation, each share of 5% Cumulative Preferred
Stock entitling the holder thereof to one vote.



<PAGE>


        (b) Any director who shall have been elected by holders of 5% Cumulative
  Preferred Stock or by any director so elected as herein  contemplated,  may be
  removed at any time during a Voting Period,  either for or without cause,  by,
  and only by, the  affirmative  votes of the holders of record of a majority of
  the  outstanding  shares of 5% Cumulative  Preferred  Stock given at a special
  meeting of such stockholders  called for the purpose,  and any vacancy thereby
  created  may  be  filled  during  such  Voting  Period  by the  holders  of 5%
  Cumulative  Preferred  Stock present in person or represented by proxy at such
  meeting.  Any  director  to be  elected  by  the  Board  of  Directors  of the
  Corporation  to  replace  a  director  elected  by  holders  of 5%  Cumulative
  Preferred Stock or elected by a director as in this sentence provided shall be
  elected by the  remaining  director  theretofore  elected by the holders of 5%
  Cumulative  Preferred Stock. At the end of the Voting Period the holders of 5%
  Cumulative Preferred Stock shall be automatically divested of all voting power
  vested in them under this Section 3C(4) but subject  always to the  subsequent
  vesting  hereunder of voting power in the holders of 5%  Cumulative  Preferred
  Stock in the event of any similar default or defaults thereafter.

      (5) Ranking. All shares of 5% Cumulative Preferred Stock shall be of equal
rank  in  respect  of  the  preference  as to  dividends  and to  payments  upon
liquidation,  distribution  or sale of assets,  dissolution or winding up of the
Corporation with all shares of the Preferred Stock without nominal or par value,
the Preferred  Stock with par value,  the $4.50  Dividend  Cumulative  Preferred
Stock,  the $4.30  Dividend  Cumulative  Preferred  Stock and the $5.50 Dividend
Cumulative Convertible Preferred Stock.

      (6) Amendments. While any 5% Cumulative Preferred Stock is outstanding the
Corporation shall not alter or change the preferences,  special rights or powers
of the 5% Cumulative Preferred Stock so as to adversely affect the 5% Cumulative
Preferred  Stock  without  the  affirmative  consent  (given in  writing or at a
meeting  duly called for that  purpose)  of the  holders of at least  two-thirds
(2/3rds) of the aggregate number of shares of 5% Cumulative Preferred Stock then
outstanding.

                     $4.50 Dividend Cumulative Preferred Stock

      D.(1) Dividends.  The holders of $4.50 Dividend Cumulative Preferred Stock
in  preference  to the  holders  of Common  Stock of the  Corporation,  shall be
entitled to receive,  as and when declared by the Board of Directors,  dividends
at the rate of $4.50 per share per annum and no more,  payable  semi-annually on
the last days of June and December in each year,  commencing  December 31, 1961.
Such  preferential  dividends  shall  accrue,  with  respect  to shares of $4.50
Dividend  Cumulative  Preferred  Stock  issued  prior to January  1, 1962,  from
October 27,  1961,  and with  respect to shares of such Stock issued on or after
January 1, 1962, from the first day of the semi-annual  dividend period in which
such shares  shall be issued,  and shall be  cumulative  so that if dividends in
respect of any  semi-annual  dividend  period at the rate of $4.50 per share per
annum  shall not have been  paid  upon or  declared  and set apart for the $4.50
Dividend  Cumulative  Preferred  Stock,  the  deficiency  shall be fully paid or
declared and set apart before any dividend shall be paid upon or declared or set
apart  for the  Common  Stock.  Preferential  dividends  on the  $4.50  Dividend
Cumulative  Preferred  Stock  shall be  deemed  to  accrue  from  day to day.  A
semi-annual  dividend  period  shall begin on the day  following  each  dividend
payment  date set forth above and end on the next  succeeding  dividend  payment
date.

      (2) Liquidation,  Dissolution or Winding Up. The $4.50 Dividend Cumulative
Preferred  Stock shall be preferred as to assets over the Common Stock,  so that
in the event of the voluntary or involuntary liquidation, dissolution or winding
up of the Corporation the holders of $4.50 Dividend  Cumulative  Preferred Stock
shall be entitled to have set apart for them,  or to be paid,  out of the assets
of the  Corporation  before  any  distribution  is made to or set  apart for the
holders  of Common  Stock an amount in cash  equal to and in no event  more than
$100.00  per share plus a sum equal to accrued  and  unpaid  dividends  thereon,
whether or not earned or declared.



<PAGE>


      (3) Optional Redemption.

      (a) At the option of the  Corporation,  by vote of the Board of Directors,
the  $4.50  Dividend  Cumulative  Preferred  Stock may be  redeemed  on or after
November 1, 1966 as a whole,  or in part at any time or from time to time,  at a
redemption  price equal to $103.00 per share plus an amount equal to accrued and
unpaid dividends thereon to the date fixed for redemption, whether or not earned
or declared,  and no more. If less than all of the  outstanding  shares of $4.50
Dividend Cumulative Preferred Stock are to be redeemed the shares to be redeemed
shall be determined by lot in such usual manner and subject to such  regulations
as the Board of Directors in its sole discretion shall prescribe.

      (b) At least 30 days prior to the date fixed for the  redemption of shares
of the $4.50  Dividend  Cumulative  Preferred  Stock a written  notice  shall be
mailed to each holder of record of shares of $4.50 Dividend Cumulative Preferred
Stock to be redeemed in a postage prepaid  envelope  addressed to such holder at
his post office  address as shown on the records of the  Corporation,  notifying
such holder of the election of the  Corporation  to redeem such shares,  stating
the date fixed for redemption thereof (hereinafter referred to as the redemption
date),  and calling  upon such holder to  surrender  to the  Corporation  on the
redemption  date at the place  designated  in such  notice  his  certificate  or
certificates  representing  the  number of shares  specified  in such  notice of
redemption.

      (c) On or after  the  redemption  date  each  holder  of  shares  of $4.50
Dividend  Cumulative  Preferred Stock to be redeemed shall present and surrender
his certificate or certificates  for such shares to the Corporation at the place
designated  in such notice and  thereupon  the  redemption  price of such shares
shall be paid to or on the  order  of the  person  whose  name  appears  on such
certificate  or  certificates   as  the  owner  thereof  and  each   surrendered
certificate shall be canceled.

      (d) In case less than all the shares  represented by any such  certificate
are  redeemed a new  certificate  shall be issued  representing  the  unredeemed
shares.

      (e) From and after the  redemption  date (unless  default shall be made by
the Corporation in payment of the redemption  price) all dividends on the shares
of $4.50 Dividend  Cumulative  Preferred Stock designated for redemption in such
notice  shall  cease  to  accrue,  and all  rights  of the  holders  thereof  as
stockholders  of the  Corporation,  except the right to receive  the  redemption
price thereof upon the surrender of certificates  representing  the same,  shall
cease and determine and such shares shall not thereafter be transferred  (except
with the consent of the Corporation) on the books of the  Corporation,  and such
shares shall not be deemed to be outstanding for any purpose whatsoever.

      (f) At its  election  the  Corporation  prior to the  redemption  date may
deposit  the  redemption  price  of the  shares  of  $4.50  Dividend  Cumulative
Preferred Stock so called for redemption in trust for the holders thereof with a
bank or trust company (having a capital and surplus of not less than $1,000,000)
in the City of  Wilmington,  Delaware or in the Borough of  Manhattan,  City and
State of New York or in any  other  city in which  the  Corporation  at the time
shall maintain a transfer  agency with respect to such stock, in which case such
redemption notice shall state the date of such deposit, shall specify the office
of such bank or trust company as the place of payment of the  redemption  price,
and shall call upon such holders to surrender the certificates representing such
shares at such place on or after the date fixed in such redemption notice (which
shall not be later than the redemption  date) against  payment of the redemption
price.  From and after the making of such deposit,  the shares of $4.50 Dividend
Cumulative  Preferred Stock so designated for redemption  shall not be deemed to
be outstanding for any purpose whatsoever, and the rights of the holders of such
shares  shall be limited to the right to receive  the  redemption  price of such
shares,  without interest,  upon surrender of the certificates  representing the
same to the Corporation at said office of such bank or trust company.

      (g) Any moneys so deposited which shall remain unclaimed by the holders of
such $4.50 Dividend Cumulative Preferred Stock at the end of six years after the
redemption  date,  shall  be  returned  by such  bank or  trust  company  to the
Corporation after which the holders of the $4.50 Dividend  Cumulative  Preferred
Stock shall have no further interest in such moneys.

      (4) Voting Rights.

      (a) Except as otherwise provided herein and except as provided by statute,
the $4.50 Dividend  Cumulative  Preferred Stock shall have no voting rights.  In
case at any time three or more full semi-annual  dividends (whether  consecutive
or not) on the $4.50 Dividend  Cumulative  Preferred  Stock shall be in arrears,
then during the period  (hereinafter  in this  Section  3D(4)  called the Voting
Period)  commencing  with such time and ending with the time when all arrears in
dividends on the $4.50 Dividend Cumulative  Preferred Stock shall have been paid
and the full dividend on the $4.50 Dividend  Cumulative  Preferred Stock for the
then current  semi-annual  dividend  period shall have been declared and paid or
set aside for payment,  at any meeting of the  stockholders  of the  Corporation
held for the  election of  directors  during the Voting  Period,  the holders of
$4.50 Dividend  Cumulative  Preferred Stock represented in person or by proxy at
said meeting shall be entitled,  as a class,  to the exclusion of the holders of
all other  classes of stock of the  Corporation,  to elect two  directors of the
Corporation,  each share of $4.50 Dividend Cumulative  Preferred Stock entitling
the holder thereof to one vote.

      (b) Any director who shall have been elected by holders of $4.50  Dividend
Cumulative Preferred Stock or by any director so elected as herein contemplated,
may be removed at any time during a Voting Period,  either for or without cause,
by, and only by, the affirmative votes of the holders of record of a majority of
the outstanding shares of $4.50 Dividend  Cumulative  Preferred Stock given at a
special  meeting of such  stockholders  called for the purpose,  and any vacancy
thereby  created may be filled during such Voting Period by the holders of $4.50
Dividend Cumulative Preferred Stock present in person or represented by proxy at
such  meeting.  Any  director  to be  elected by the Board of  Directors  of the
Corporation  to  replace  a  director  elected  by  holders  of  $4.50  Dividend
Cumulative Preferred Stock or elected by a director as in this sentence provided
shall be elected by the remaining director theretofore elected by the holders of
$4.50 Dividend  Cumulative  Preferred Stock. At the end of the Voting Period the
holders of $4.50  Dividend  Cumulative  Preferred  Stock shall be  automatically
divested of all voting power vested in them under this Section 3D(4) but subject
always to the  subsequent  vesting  hereunder  of voting power in the holders of
$4.50 Dividend Cumulative Preferred Stock in the event of any similar default or
defaults thereafter.

      (5) Ranking. All shares of $4.50 Dividend Cumulative Preferred Stock shall
be of equal rank in respect of the  preference  as to dividends  and to payments
upon the liquidation,  distribution or sale of assets, dissolution or winding up
of the  Corporation  with all shares of Preferred  Stock without  nominal or par
value,  the Preferred Stock with par value,  the 5% Cumulative  Preferred Stock,
the $4.30 Dividend Cumulative  Preferred Stock and the $5.50 Dividend Cumulative
Convertible Preferred Stock.

      (6) Amendment.  While any of the $4.50 Dividend Cumulative Preferred Stock
is  outstanding  the  Corporation  shall not alter or  change  the  preferences,
special rights or powers of the $4.50 Dividend Cumulative  Preferred Stock so as
to adversely  affect the $4.50 Dividend  Cumulative  Preferred Stock without the
affirmative  consent  (given in  writing  or at a meeting  duly  called for that
purpose) of the holders of at least two-thirds  (2/3rds) of the aggregate number
of shares of $4.50 Dividend Cumulative Preferred Stock then outstanding.



<PAGE>


                    $4.30 Dividend Cumulative Preferred Stock

      E.(1) Dividends.  The holders of $4.30 Dividend Cumulative Preferred Stock
in  preference  to the  holders  of Common  Stock of the  Corporation,  shall be
entitled to receive,  as and when declared by the Board of Directors,  dividends
at the rate of $4.30 per share per annum and no more,  payable  semi-annually on
the last days of March and September in each year, commencing on the last day of
the  semi-annual  dividend  period in which dividends on such shares commence to
accrue.  Such  preferential  dividends  shall accrue,  with respect to shares of
$4.30 Dividend  Cumulative  Preferred  Stock issued prior to April 1, 1966, from
November 1, 1965,  and with  respect to shares of such Stock  issued on or after
April 1, 1966,  from the first day of the  semi-annual  dividend period in which
such shares  shall be issued,  and shall be  cumulative  so that if dividends in
respect of any  semi-annual  dividend  period at the rate of $4.30 per share per
annum  shall not have been  paid  upon or  declared  and set apart for the $4.30
Dividend  Cumulative  Preferred  Stock,  the  deficiency  shall be fully paid or
declared and set apart before any dividend shall be paid upon or declared or set
apart  for the  Common  Stock.  Preferential  dividends  on the  $4.30  Dividend
Cumulative  Preferred  Stock  shall be  deemed  to  accrue  from  day to day.  A
semi-annual  dividend  period  shall begin on the day  following  each  dividend
payment  date set forth above and end on the next  succeeding  dividend  payment
date.

      (2) Liquidation,  Dissolution or Winding Up. The $4.30 Dividend Cumulative
Preferred  Stock shall be preferred as to assets over the Common Stock,  so that
in the event of the  liquidation,  dissolution or winding up of the  Corporation
the holders of $4.30 Dividend  Cumulative  Preferred  Stock shall be entitled to
have set apart for them,  or to be paid,  out of the  assets of the  Corporation
before any  distribution is made to or set apart for the holders of Common Stock
an amount in cash equal to and in no event more than (i)  $100.00 per share plus
a sum equal to accrued and unpaid  dividends  thereon,  whether or not earned or
declared, in the event of an involuntary liquidation, dissolution or winding up,
or (ii) the then  applicable  redemption  price  per  share,  in the  event of a
voluntary liquidation, dissolution or winding up.

      (3) Optional Redemption.

      (a) At the option of the  Corporation,  by vote of the Board of Directors,
the  $4.30  Dividend  Cumulative  Preferred  Stock may be  redeemed  on or after
November 1, 1970 as a whole,  or in part at any time or from time to time,  at a
redemption  price  which shall be (i) the greater of (x) $105.00 per share minus
the sum of fifty cents for each  November 1 during the period after  November 1,
1970 and up to and  including  the date fixed for  redemption or (y) $100.00 per
share,  plus (ii) an amount equal to accrued and unpaid dividends thereon to the
date fixed for redemption, whether or not earned or declared.

      (b) The term "Common  Stock",  as used in this Section  3E(3),  shall mean
Common Stock of the character  authorized at the date of the initial issuance of
the $4.30 Dividend Cumulative Preferred Stock, or, in case of a reclassification
or exchange of such Common Stock,  the Stock into or for which such Common Stock
shall be reclassified or exchanged.

      (c)  If  less  than  all of  the  outstanding  shares  of  $4.30  Dividend
Cumulative Preferred Stock are to be redeemed the shares to be redeemed shall be
determined  by lot in such usual manner and subject to such  regulations  as the
Board of Directors in its sole discretion shall prescribe.

      (d) At least 30 days prior to the date fixed for the  redemption of shares
of the $4.30  Dividend  Cumulative  Preferred  Stock a written  notice  shall be
mailed to each holder of record of shares of $4.30 Dividend Cumulative Preferred
Stock to be redeemed in a postage prepaid  envelope  addressed to such holder at
his post office  address as shown on the records of the  Corporation,  notifying
such holder of the

<PAGE>


      election of the Corporation to redeem such shares,  stating the date fixed
for redemption  thereof  (hereinafter  referred to as the redemption  date), and
calling upon such holder to surrender to the  Corporation on the redemption date
at  the  place  designated  in  such  notice  his  certificate  or  certificates
representing the number of shares specified in such notice of redemption.

      (e) On or after  the  redemption  date  each  holder  of  shares  of $4.30
Dividend  Cumulative  Preferred Stock to be redeemed shall present and surrender
his certificate or certificates  for such shares to the Corporation at the place
designated  in such notice and  thereupon  the  redemption  price of such shares
shall be paid to or on the  order  of the  person  whose  name  appears  on such
certificate  or  certificates   as  the  owner  thereof  and  each   surrendered
certificate shall be canceled.

      (f) In case less than all the shares  represented by any such  certificate
are  redeemed a new  certificate  shall be issued  representing  the  unredeemed
shares.

      (g) From and after the  redemption  date (unless  default shall be made by
the Corporation in payment of the redemption  price) all dividends on the shares
of $4.30 Dividend  Cumulative  Preferred Stock designated for redemption in such
notice  shall  cease  to  accrue,  and all  rights  of the  holders  thereof  as
stockholders  of the  Corporation,  except the right to receive  the  redemption
price thereof upon the surrender of certificates  representing  the same,  shall
cease and determine and such shares shall not thereafter be transferred  (except
with the consent of the Corporation) on the books of the  Corporation,  and such
shares shall not be deemed to be outstanding for any purpose whatsoever.

      h) At its  election  the  Corporation  prior  to the  redemption  date may
deposit  the  redemption  price  of the  shares  of  $4.30  Dividend  Cumulative
Preferred Stock so called for redemption in trust for the holders thereof with a
bank or trust company (having a capital and surplus of not less than $1,000,000)
in the City of  Wilmington,  Delaware or in the Borough of  Manhattan,  City and
State of New York or in any  other  city in which  the  Corporation  at the time
shall maintain a transfer  agency with respect to such stock, in which case such
redemption notice shall state the date of such deposit, shall specify the office
of such bank or trust company as the place of payment of the  redemption  price,
and shall call upon such holders to surrender the certificates representing such
shares at such price on or after the date fixed in such redemption notice (which
shall not be later than the redemption  date) against  payment of the redemption
price.  From and after the making of such deposit,  the shares of $4.30 Dividend
Cumulative  Preferred Stock so designated for redemption  shall not be deemed to
be outstanding for any purpose whatsoever, and the rights of the holders of such
shares  shall be limited to the right to receive  the  redemption  price of such
shares,  without interest,  upon surrender of the certificates  representing the
same to the  Corporation  at said  offices  of such bank or trust  company.  Any
interest accrued on any funds so deposited shall be paid to the Corporation from
time to time.

      (i) Any moneys so deposited which shall remain unclaimed by the holders of
such $4.30 Dividend Cumulative Preferred Stock at the end of six years after the
redemption  date,  shall  be  returned  by such  bank or  trust  company  to the
Corporation after which the holders of the $4.30 Dividend  Cumulative  Preferred
Stock shall have no further interest in such moneys.

      (4) Voting Rights.

      (a) Each  holder of $4.30  Dividend  Cumulative  Preferred  Stock shall be
entitled to one vote for each share held on each matter  submitted  to a vote of
stockholders  of the  Corporation  and,  except  as  otherwise  herein or by law
provided, the $4.30 Dividend Cumulative Preferred Stock, the Common Stock of the
Corporation, and any other capital stock of the Corporation at the time entitled
thereto,  shall vote  together  as one class,  except  that while the holders of
$4.30 Dividend  Cumulative  Preferred Stock,  voting as a class, are entitled to
elect two  directors  as  hereinafter  provided,  they shall not be  entitled to
participate  with the Common Stock (or any other  capital stock as aforesaid) in
the election of any other directors.


<PAGE>



      (b) In case at any time three or more full semi-annual  dividends (whether
consecutive or not) on the $4.30 Dividend Cumulative Preferred Stock shall be in
arrears,  then during the period  (hereinafter  in this Section 3E(4) called the
Class Voting Period) commencing with such time and ending with the time when all
arrears in dividends on the $4.30 Dividend Cumulative Preferred Stock shall have
been paid and the full dividend on the $4.30 Dividend Cumulative Preferred Stock
for the then current  semi-annual  dividend  period shall have been declared and
paid or set  aside  for  payment,  at any  meeting  of the  stockholders  of the
Corporation  held for the election of directors  during the Class Voting Period,
the holders of $4.30 Dividend  Cumulative  Preferred Stock represented in person
or by proxy at said meeting shall be entitled,  as a class,  to the exclusion of
the  holders  of all other  classes  of stock of the  Corporation,  to elect two
directors of the Corporation,  each share of $4.30 Dividend Cumulative Preferred
Stock entitling the holder thereof to one vote.

      (c) Any director who shall have been elected by holders of $4.30  Dividend
Cumulative Preferred Stock or by any director so elected as herein contemplated,
may be removed at any time during a Class Voting  Period,  either for or without
cause,  by, and only by,  the  affirmative  votes of the  holders of record of a
majority of the outstanding shares of $4.30 Dividend Cumulative  Preferred Stock
given at a special meeting of such stockholders called for the purpose,  and any
vacancy  thereby  created may be filled  during such Class Voting  Period by the
holders  of $4.30  Dividend  Cumulative  Preferred  Stock  present  in person or
represented by proxy at such meeting. Any director to be elected by the Board of
Directors of the  Corporation to replace a director  elected by holders of $4.30
Dividend Cumulative Preferred Stock or elected by a director as in this sentence
provided shall be elected by the remaining director  theretofore  elected by the
holders of $4.30 Dividend  Cumulative  Preferred  Stock. At the end of the Class
Voting Period the holders of $4.30 Dividend Cumulative  Preferred Stock shall be
automatically  divested of all voting  power  vested in them under this  Section
3E(4) but subject always to the subsequent  vesting hereunder of voting power in
the holders of $4.30  Dividend  Cumulative  Preferred  Stock in the event of any
similar default or defaults thereafter.

      (5) Retirement.  Shares of $4.30 Dividend Cumulative  Preferred Stock
converted prior to November 1, 1977 shall not be reissued.

      (6) Ranking. All shares of $4.30 Dividend Cumulative Preferred Stock shall
be of equal rank in respect of the  preference  as to dividends  and to payments
upon the liquidation,  distribution or sale of assets, dissolution or winding up
of the Corporation with all shares of the Preferred Stock without nominal or par
value,  the Preferred Stock with par value,  the 5% Cumulative  Preferred Stock,
the $4.50 Dividend Cumulative  Preferred Stock and the $5.50 Dividend Cumulative
Convertible Preferred Stock.

      (7) Amendment.  While any of the $4.30 Dividend Cumulative Preferred Stock
is  outstanding  the  Corporation  shall not alter or  change  the  preferences,
special rights or powers of the $4.30 Dividend Cumulative  Preferred Stock so as
to adversely  affect the $4.30 Dividend  Cumulative  Preferred Stock without the
affirmative  consent  (given in  writing  or at a meeting  duly  called for that
purpose) of the holders of at least two-thirds  (2/3rds) of the aggregate number
of shares of $4.30 Dividend Cumulative Preferred Stock then outstanding.



<PAGE>


                $5.50 Dividend Cumulative Convertible Preferred Stock

      F.(1)  Dividends.  The holders of $5.50  Dividend  Cumulative  Convertible
Preferred  Stock,  in  preference  to the  holders  of the  Common  Stock of the
Corporation,  shall be entitled to receive, as and when declared by the Board of
Directors,  dividends  at the rate of $5.50  per  share  per  annum and no more,
payable  quarterly  on the last days of January,  April,  July,  October in each
year,  commencing  on the last day of the  quarterly  dividend  period  in which
dividends  on such shares  commence  to accrue.  Such  preferential  dividend on
shares of $5.50 Dividend Cumulative  Convertible  Preferred Stock shall commence
to accrue:

           (i) if such  stock is issued on or prior to the  record  date for the
      first  dividend  on  shares  of  $5.50  Dividend  Cumulative   Convertible
      Preferred Stock, then from the date of issue thereof;

           (ii) if such stock is issued during the period commencing immediately
      after the  record  date for a  dividend  on  shares of the $5.50  Dividend
      Cumulative Convertible Preferred Stock and ending at the close of business
      on the  payment  date for such  dividends,  then from such last  mentioned
      dividend payment date; and

           (iii)  otherwise  from the dividend  payment date next  preceding the
      date of issue of such shares.

Preferential  dividends on the $5.50 Dividend Cumulative  Convertible  Preferred
Stock  shall be deemed to accrue from day to day. A  quarterly  dividend  period
shall begin on the day following each dividend  payment date set forth above and
end on the next succeeding  dividend payment date. Such  preferential  dividends
shall be cumulative,  so that if dividends in respect of any quarterly  dividend
period at the rate of $5.50  per  share per annum  shall not have been paid upon
and  declared  and set  apart  for the  $5.50  Dividend  Cumulative  Convertible
Preferred  Stock,  the deficiency  shall be fully paid or declared and set apart
before any  dividend  which  shall be paid upon or declared or set apart for the
Common Stock.  Accumulations of dividends on shares of $5.50 Dividend Cumulative
Convertible Preferred Stock shall not bear interest.

      (2) Liquidation,  Dissolution or Winding Up. The $5.50 Dividend Cumulative
Convertible  Preferred  Stock  shall be  preferred  as to assets over the Common
Stock,  so  that in the  event  of the  voluntary  or  involuntary  liquidation,
dissolution  or winding up of the  Corporation,  the  holders of $5.50  Dividend
Cumulative  Convertible  Preferred Stock shall be entitled to have set apart for
them,  or  to be  paid  out  of  the  assets  of  the  Corporation,  before  any
distribution  is made to or set apart for the holders of Common Stock, an amount
in cash  equal to  $20.00  per  share  plus a sum equal to  accrued  and  unpaid
dividends  thereon,  whether or not  declared,  and after payment of such amount
such  shares of $5.50  Dividend  Cumulative  Convertible  Preferred  Stock shall
participate  with the shares of Common  Stock of the  Corporation  and any other
class  or  series  of stock  entitled  to share  with  the  Common  Stock in the
distribution  of  the  remaining   assets  of  the  Corporation   available  for
distribution to stockholders after the payment of all preferential distributions
as if the shares of the $5.50 Dividend  Cumulative  Convertible  Preferred Stock
had been  converted  into shares of Common Stock of the  Corporation;  provided,
however,  that in no event  shall the holders of the $5.50  Dividend  Cumulative
Convertible  Preferred  Stock be  entitled  to receive  upon such  voluntary  or
involuntary  liquidation,  dissolution  or  winding  up an  amount  in excess of
$100.00  (including  the $20.00 per share  preferential  distribution)  for each
share of $5.50 Dividend Cumulative  Convertible Preferred Stock plus a sum equal
to accrued and unpaid dividends thereon, whether or not declared.



<PAGE>


      (3) Optional Redemption.

      (a) At the option of the  Corporation,  by vote of the Board of Directors,
the $5.50 Dividend Cumulative  Convertible  Preferred Stock may be redeemed as a
whole or in part at any time or from time to time on or after  February  1, 1983
at a  redemption  price  equal to  $100.00  per share,  plus an amount  equal to
accrued and unpaid dividends  thereon to the date fixed for redemption,  whether
or not  earned or  declared,  and no more.  If less than all of the  outstanding
shares  of $5.50  Dividend  Cumulative  Convertible  Preferred  Stock  are to be
redeemed, the shares to be redeemed shall be determined by lot in such manner as
the Board of Directors in its sole discretion shall prescribe.

      (b) At least  thirty  days prior to the date fixed for the  redemption  of
shares of the $5.50 Dividend Cumulative  Convertible  Preferred Stock, a written
notice  shall be  mailed to each  holder  of record of shares of $5.50  Dividend
Cumulative  Convertible  Preferred  Stock to be  redeemed  in a postage  prepaid
envelope  addressed  to such holder at his post  office  address as shown on the
records  of the  Corporation,  notifying  such  holder  of the  election  of the
Corporation to redeem such shares, stating the date fixed for redemption thereof
(hereinafter referred to as the "redemption date"), and calling upon such holder
to surrender to the Corporation on the redemption  date at the place  designated
in such notice his certificate or certificates  representing shares specified in
such notice of redemption.

      (c) On or after  the  redemption  date  each  holder  of  shares  of $5.50
Dividend Cumulative Convertible Preferred Stock to be redeemed shall present and
surrender his certificate or certificates  for such shares to the Corporation at
the place  designated in such notice and thereupon the redemption  price of such
shares shall be paid to or on the order of the person whose name appears on such
certificate  or  certificates   as  the  owner  thereof  and  each   surrendered
certificate shall be cancelled.

      (d) In case less than all the shares  represented by any such  certificate
are  redeemed a new  certificate  shall be issued  representing  the  unredeemed
shares.

      (e) From and after the  redemption  date (unless  default shall be made by
the Corporation in payment of the redemption  price) all dividends on the shares
of  $5.50  Dividend  Cumulative   Convertible  Preferred  Stock  designated  for
redemption  in such notice shall cease to accrue,  and all rights of the holders
thereof as  stockholders  of the  Corporation,  except the right to receive  the
redemption  price thereof upon the surrender of  certificates  representing  the
same,  shall  cease  and  terminate  and such  shares  shall not  thereafter  be
transferred  (except  with the consent of the  Corporation)  on the books of the
Corporation,  and such  shares  shall not be deemed  to be  outstanding  for any
purpose whatsoever.

(f) At its election the Corporation prior to the redemption date may deposit the
redemption  price  of  the  shares  of  $5.50  Dividend  Cumulative  Convertible
Preferred Stock so called for redemption in trust for the holders thereof with a
bank or trust company (having a capital and surplus of not less than $1,000,000)
in the City of  Wilmington,  Delaware or in the Borough of  Manhattan,  City and
State of New York or in any  other  city in which  the  Corporation  at the time
shall maintain a transfer  agency with respect to such stock, in which case such
redemption notice shall state the date of such deposit, shall specify the office
of such bank or trust company as the place of payment of the  redemption  price,
and shall call upon such holders to surrender the certificates representing such
shares at such price on or after the date fixed in such redemption notice (which
shall not be later than the redemption  date) against  payment of the redemption
price.  From and after the making of such deposit,  the shares of $5.50 Dividend
Cumulative Convertible Preferred Stock so designated for redemption shall not be
deemed to be  outstanding  for any  purpose  whatsoever,  and the  rights of the
holders of such shares shall be limited to the right to receive the

<PAGE>


redemption  price  of such  shares,  without  interest,  upon  surrender  of the
certificates  representing  the same to the  Corporation  at said office of such
bank or trust  company,  and the right of conversion (on or before the tenth day
prior to the date fixed for redemption) herein provided.  Any funds so deposited
which shall not be required for such redemption  because of the exercise of such
right of  conversion  after the date of such  deposit  shall be  returned to the
Corporation  forthwith.  Any interest accrued on such funds shall be paid to the
Corporation from time to time.

      (g) Any moneys so deposited which shall remain unclaimed by the holders of
such $5.50 Dividend  Cumulative  Convertible  Preferred  Stock at the end of six
years after the redemption date, shall be returned by such bank or trust company
to the  Corporation  after  which the holders of the $5.50  Dividend  Cumulative
Convertible Preferred Stock shall have no further interest in such moneys.

      (h) All  shares of the $5.50  Dividend  Cumulative  Convertible  Preferred
Stock  redeemed  shall be cancelled and retired and no shares shall be issued in
place thereof.

      (4) Voting Rights.

      (a) Except as  otherwise  herein or by law  provided,  (i) on each  matter
submitted to a vote of  stockholders of the  Corporation  (including  mergers or
consolidations   unless  such  multiple  voting  is  prohibited  by  statute  in
connection  therewith),  each holder of $5.50  Dividend  Cumulative  Convertible
Preferred Stock shall,  for each share held by him, be entitled to the number of
votes  equal to the number of shares  (including  fractions  thereof)  of Common
Stock into which such share of $5.50 Dividend Cumulative  Convertible  Preferred
Stock may be  converted  pursuant to Section  3F(5) below on the record date for
determining   stockholders  entitled  to  vote,  and  (ii)  the  $5.50  Dividend
Cumulative Convertible Preferred Stock, the Common Stock of the Corporation, and
any other capital stock of the Corporation at the time entitled  thereto,  shall
vote  together  as one  class,  and  notwithstanding  that the  holders of $5.50
Dividend  Cumulative  Convertible  Preferred  Stock,  voting as a class,  may be
entitled to elect two directors as hereinafter provided,  they shall be entitled
to  participate  with the Common Stock (or any other capital stock as aforesaid)
in the election of any other directors.

      (b) In case at any time three or more full  quarterly  dividends  (whether
consecutive or not) on the $5.50 Dividend Cumulative Convertible Preferred Stock
shall be in arrears,  then during the period  (hereinafter in this Section 3F(4)
called the Class Voting  Period)  commencing  with such time and ending with the
time when all arrears in dividends on the $5.50 Dividend Cumulative  Convertible
Preferred Stock shall have been paid and the full dividend on the $5.50 Dividend
Cumulative  Convertible  Preferred Stock for the then current quarterly dividend
period  shall  have been  declared  and paid or set aside  for  payment,  at any
meeting the  stockholders of the Corporation  held for the election of directors
during  the Class  Voting  Period,  the  holders  of $5.50  Dividend  Cumulative
Convertible  Preferred  Stock  represented in person or by proxy at said meeting
shall be  entitled,  as a class,  to the  exclusion  of the holders of all other
classes of stock of the Corporation,  to elect two directors of the Corporation,
each share of $5.50 Dividend  Cumulative  Convertible  Preferred Stock entitling
the holder thereof to one vote.

      (c) Any director who shall have been elected by holders of $5.50  Dividend
Cumulative  Convertible  Preferred Stock or by any director so elected as herein
contemplated,  may be removed at any time during a Class Voting  Period,  either
for or without cause,  by, and only by, the affirmative  votes of the holders of
record of a majority  of the  outstanding  shares of $5.50  Dividend  Cumulative
Convertible  Preferred  Stock  given at a special  meeting of such  stockholders
called for the purpose,  and any vacancy  thereby  created may be filled  during
such Class Voting Period by the holders of $5.50 Dividend  Cumulative  Preferred
Stock present in person or represented by proxy at such a meeting.  Any director
to be elected by the Board of Directors of the Corporation to replace a director
elected by holders of $5.50 Dividend Cumulative  Convertible  Preferred Stock or
elected by a director as in this sentence provided shall be elected by the

<PAGE>


      remaining  director  theretofore  elected by the holders of $5.50 Dividend
Cumulative  Convertible  Preferred  Stock. At the end of the Class Voting Period
the holders of $5.50 Dividend  Cumulative  Convertible  Preferred Stock shall be
automatically  divested of all voting  power  vested in them under this  Section
3F(4), but subject always to the subsequent vesting hereunder of voting power in
the holders of $5.50  Dividend  Cumulative  Convertible  Preferred  Stock in the
event of any similar default or defaults thereafter.

      (d) A meeting for the removal of a director  elected by the holders of the
$5.50 Dividend Cumulative Convertible Preferred Stock as a class and the filling
of  the  vacancy  created  thereby  shall  be  called  by the  Secretary  of the
Corporation within ten (10) days after receipt of a request therefor,  signed by
the  holders  of not  less  than  25% of the then  outstanding  shares  of $5.50
Dividend Cumulative  Convertible Preferred Stock, and such meeting shall be held
at the earliest  practicable date thereafter.  At such meeting,  the presence in
person or by proxy of the  holders of a majority  of the  outstanding  shares of
$5.50  Dividend  Cumulative  Convertible  Preferred  Stock  shall be required to
constitute  a quorum;  in the  absence of a quorum,  a majority  of the  holders
present in person or by proxy shall have power to adjourn the meeting  from time
to time without notice,  other than announcement at the meeting,  until a quorum
shall be present.

      (5) Conversion Option.

      (a) Each  share of the $5.50  Dividend  Cumulative  Convertible  Preferred
Stock may be converted, at the option of the holder thereof, at any time (but in
case the same shall be called for  redemption,  only until the close of business
on the tenth day prior to the date fixed for the  redemption  thereof) into nine
shares of fully paid and  non-assessable  Common Stock of the  Corporation,  the
respective  number  of  shares  of Common  Stock in any case  being  subject  to
adjustment, however, as hereinafter in Section 3F(6) provided. The period during
which shares of $5.50 Dividend Cumulative  Convertible Preferred Stock may be so
converted is hereinafter in this Section 3F called the conversion  period.  Upon
any such conversion of shares of $5.50 Dividend Cumulative Convertible Preferred
Stock no allowance  or  adjustment  shall be made with respect to the  dividends
upon either class of stock.

      (b) Such option to convert shares of $5.50 Dividend Cumulative Convertible
Preferred  Stock into shares of Common Stock may be  exercised  by, and only by,
surrendering  for such purpose to the  Corporation,  at the office of one of its
Transfer Agents for its Common Stock for the time being,  located in the City of
New York or in Wilmington,  Delaware, certificates representing the shares to be
converted, duly endorsed or accompanied by proper instruments of transfer, if so
required by the  Corporation  or any such  Transfer  Agent.  At the time of such
surrender,  the person  exercising  such option to convert shall be deemed to be
the  holder of the  shares  of  Common  Stock  issuable  upon  such  conversion,
notwithstanding  that the stock  transfer books of the  Corporation  may then be
closed or that  certificates  representing such shares of Common Stock shall not
then be actually delivered to such person.

      (c) The term "Common Stock," as used in this Section 3F, shall mean Common
Stock of the  character  authorized  at the date of the initial  issuance of the
$5.50  Dividend  Cumulative  Convertible  Preferred  Stock  or,  in  case  of  a
reclassification  or exchange of such Common Stock,  shares of the stock into or
for  which  such  Common  Stock  shall  be  reclassified  or  exchanged  and all
provisions of this Section 3F shall be applied  appropriately thereto and to any
stock resulting from any subsequent reclassification or exchange thereof.

      (6)  Conversion  Adjustments.  The  number of shares of Common  Stock into
which the shares of $5.50 Dividend Cumulative Convertible Preferred Stock may be
converted shall be subject to adjustment from time to time in certain  instances
as follows:



<PAGE>


      (a) If at any time during the conversion period the outstanding  shares of
Common Stock of the  Corporation  shall be subdivided or combined into a greater
or smaller number of shares (by way of reclassification or split up of shares or
in any other manner),  then the number of shares of Common Stock into which each
share of $5.50 Dividend Cumulative  Convertible Preferred Stock may be converted
shall be increased or reduced in the same proportion.

      (b) If at any time during the  conversion  period there is declared on the
Common  Stock of the  Corporation  any  dividend  payable in Common Stock of the
Corporation,  then the number of shares of Common Stock into which each share of
$5.50 Dividend Cumulative  Convertible Preferred Stock may be converted shall be
increased in the same  proportion  as the  aggregate  number of shares of Common
Stock issued on account of such dividend  (other than treasury  shares) bears to
the aggregate number of shares of Common Stock on which such dividend is paid.

      (c) If the  Corporation  shall  issue or sell any  shares of Common  Stock
(excluding  certain  shares  hereinafter  set forth in Section  3F(6)(d))  for a
consideration  per share less than the conversion price  (determined by dividing
One Hundred  Dollars ($100) by the number of shares of Common Stock  deliverable
upon conversion of each share of $5.50 Dividend Cumulative Convertible Preferred
Stock,  immediately  before  the  time  provided  for  such  adjustment),   said
conversion price shall be adjusted to a price determined by dividing:

         (i) an amount equal to (A) the number of issued  shares of Common Stock
      immediately  prior to such issuance or sale multiplied by the then current
      conversion  price  plus (B) the  consideration,  if any,  received  by the
      Corporation  upon such  issuance or sale and plus (C) the net  excess,  if
      any, of the aggregate proceeds actually received from the sale or issuance
      of Common  Stock  (except as provided in Section  3F(6)(d))  over the then
      current  conversion  price  less  (D)  the  deficiency  in  the  aggregate
      proceeds,  received or deemed to be received, from the sale or issuance of
      Common  Stock  (except as  provided  in Section  3F(6)(d))  under the then
      current  conversion price (excluding the consideration  received under (B)
      above) all as determined  since the last required change in the conversion
      price as a result of this formula, by

         (ii) the number of issued shares of Common Stock immediately after such
issuance or sale.

      After such  calculation,  the number of shares of Common Stock deliverable
upon  conversion  of each  share of the $5.50  Dividend  Cumulative  Convertible
Preferred  Stock shall be the quotient  obtained by dividing One Hundred Dollars
($100)  by  the  conversion   price  so  adjusted;   provided,   however,   that
notwithstanding  the  foregoing,  no  adjustment  shall be made pursuant to this
Section  3F(6)(c)  which would  result in a reduction of the number of shares of
Common  Stock  deliverable  upon  such  conversion,  except  for  an  adjustment
occurring  after a prior  increase as provided in Sections  3F(6)(c)(B)(iv)  and
(v).

For the purpose of this Section  3F(6)(c),  the  following  provisions  shall be
applicable:

      (A) In case  of the  issuance  or  sale of  Common  Stock  for  cash,  the
consideration  shall  be  deemed  to  be  the  cash  proceeds  received  by  the
Corporation  before  deducting  any  discounts,  commissions  or other  expenses
incurred  in  connection  therewith.  In the case of  issuance or sale of Common
Stock  (otherwise  than upon conversion or exchange of securities by their terms
convertible or exchangeable  into Common Stock) for a  consideration  other than
cash,  the  amount of such  consideration  shall be deemed to be the fair  value
thereof as determined by the Board of Directors,  irrespective of the accounting
treatment thereof.



<PAGE>


      (B) If the Corporation issues options or rights to subscribe for shares of
Common  Stock or  issues  securities  convertible  into,  exchangeable  for,  or
carrying rights of purchase of, shares of Common Stock, and if the consideration
per share of the Common  Stock  deliverable  upon  exercise  of such  options or
rights or upon conversion or exchange of such securities (determined by dividing
the total amount received or receivable by the Corporation as consideration  for
the granting of such options or rights or the issue or sale of such  convertible
or  exchangeable  securities,  plus the minimum  aggregate  amount of additional
consideration,  if any, payable to the Corporation upon the exercise, conversion
or  exchange  thereof,  by the total  maximum  number of shares of Common  Stock
issuable  upon  such  exercise,  conversion  or  exchange),  is  less  than  the
conversion  price in  effect  as to the $5.50  Dividend  Cumulative  Convertible
Preferred Stock immediately prior to such issuance:

         (i) In the case of  options  or  rights,  the  shares of  Common  Stock
      deliverable upon their exercise shall be considered to have been issued at
      the  time of  issuance  of  such  options  or  rights  and  the  aggregate
      consideration   shall  be  the  minimum  purchase  price  payable  to  the
      Corporation  upon  exercise of such options or rights plus any  additional
      consideration  received  by it for such  options  or rights at the time of
      their issuance.



         (ii) In the case of convertible or exchangeable securities, the maximum
      number  of  shares  of  Common  Stock  initially  deliverable  upon  their
      conversion or exchange shall be considered to have been issued at the time
      of issuance or sale of such  securities and for a  consideration  equal to
      the consideration received by the Corporation for such securities,  before
      deducting any discounts,  commissions or other expenses in connection with
      the  issuance  and sale of such  securities,  plus the minimum  additional
      consideration,  if any,  receivable by the Corporation upon the conversion
      or exchange thereof.

         (iii) No further  adjustment  of a conversion  price shall be made upon
      the actual  issue of such Common Stock upon the exercise of such rights or
      options  or  upon  the  conversion  or  exchange  of such  convertible  or
      exchangeable securities.

         (iv) Upon the expiration of such options or rights,  or the termination
      of such right to convert or exchange, the conversion price shall forthwith
      be  readjusted  to such  conversion  price as would have  obtained had the
      adjustment made upon the issuance of such options,  rights, or convertible
      or  exchangeable  securities  been made upon the basis of the  issuance or
      sale of only the number of shares of Common Stock actually issued upon the
      exercise of such options or rights or upon the  conversion  or exchange of
      such securities.

         (v) In the event  that,  prior to the  expiration  of such  options  or
      rights or the  termination  of such  right to  convert  or  exchange,  the
      consideration  payable on the issuance,  sale or delivery of the shares of
      Common  Stock  shall  increase,  or the  number of shares of Common  Stock
      deliverable  upon conversion of or in exchange for any such convertible or
      exchangeable security shall decrease, the conversion price shall forthwith
      be  readjusted  to such  conversion  price as would have  obtained had the
      adjustment  made upon the issuance of such options,  rights or convertible
      or  exchangeable  securities  been made (except with respect to options or
      rights  exercised  or  securities  converted  or  exchanged  prior to such
      readjustment)  upon the basis of such increased  consideration  payable or
      decreased number of shares deliverable.

         (vi)  Options  or rights  issued or  granted  pro rata to  stockholders
      without consideration and securities  convertible into,  exchangeable for,
      or carry rights of purchase of, shares of Common Stock,  which  securities
      are  issuable by way of dividend or other  distribution  to  stockholders,
      shall be deemed to have been issued or granted at the close of business on
      the date fixed for the  determination  of stockholders and shall be deemed
      to have been issued without consideration.



<PAGE>


      (C) Any shares of Common Stock or other securities held in the treasury of
the Corporation shall be deemed issued and the sale or other disposition thereof
shall not be deemed an issuance or sale thereof.

      (d) The conversion price shall not be adjusted by reason of,

         (i) the issuance of shares upon the  conversion  of the $5.50  Dividend
      Cumulative Convertible Preferred Stock;

         (ii) the  issuance  of shares  pursuant  to options  or stock  purchase
      agreements granted to, or entered into with, officers and employees of the
      Corporation  or of any  subsidiary,  provided  that such shares  shall not
      exceed  150,000  shares of Common  Stock,  and provided  further that such
      number of 150,000  shares shall be increased or decreased  proportionately
      in the event of the subdivision or combination of the  outstanding  shares
      of Common  Stock of the  Corporation  into a greater or smaller  number of
      shares (by way of  reclassification  or split up of shares or in any other
      manner) or the  declaration of stock  dividends on the Common Stock of the
      Corporation; and

         (iii)  the  issuance  or sale of  shares  of  Common  Stock or of other
      securities by their terms  convertible or  exchangeable  into Common Stock
      for a consideration other than cash (except to the extent that cash may be
      included  in all or  substantially  all of the assets of a business  being
      acquired by the Corporation), provided that the number of shares of Common
      Stock  issued or sold or the  number of shares of Common  Stock into which
      such other  securities are convertible or exchangeable  does not exceed in
      the aggregate  250,000  shares,  and provided  further that such number of
      250,000  shares shall be increased  or  decreased  proportionately  in the
      event of the  subdivision  or  combination  of the  outstanding  shares of
      Common Stock of the Corporation into a greater or smaller number of shares
      (by way of  reclassification or split up of shares or in any other manner)
      or  the  declaration  of  stock  dividends  on  the  Common  Stock  of the
      Corporation.

      (e) No adjustment in the conversion  prices resulting from the application
of the  foregoing  provisions  is to be given  effect  unless,  by  making  such
adjustment,  the conversion price in effect immediately prior to such adjustment
would be changed by fifty cents or more, and such adjustment  shall be made only
in amounts of fifty cents or a multiple thereof,  but any adjustment which would
change the conversion price by less than fifty cents or a multiple thereof is to
be  carried  forward  and  given  effect  in  making  future  adjustments.   All
calculations  under this  Section  3F(6) shall be made to the nearest cent or to
the nearest one-hundredth (1/100th) of a share, as the case may be.

     (7) Miscellaneous Conversion Provisions.

      (a)  Whenever the number of shares of Common  Stock  deliverable  upon the
conversion  of the shares of $5.50  Dividend  Cumulative  Convertible  Preferred
Stock shall be adjusted pursuant to the provisions hereof, the Corporation shall
forthwith file at its principal office and with the transfer agent or agents for
the $5.50 Dividend  Cumulative  Convertible  Preferred Stock and for such Common
Stock a statement,  signed by the President or one of the Vice-Presidents of the
Corporation and by its Treasurer or one of its Assistant  Treasurers stating the
adjusted  number  of  shares  of  Common  Stock  deliverable  per share of $5.50
Dividend Cumulative  Convertible Preferred Stock and setting forth in reasonable
detail the method of calculation  and the facts  requiring  such  adjustment and
upon which such  calculation is based.  Each  adjustment  shall remain in effect
until a subsequent adjustment hereunder is required.

      (b) The  Corporation  shall at all times reserve and keep available out of
its  authorized but unissued  Common Stock,  the full number of shares of Common
Stock  deliverable  upon  the  conversion  of all  outstanding  shares  of $5.50
Dividend Cumulative Convertible Preferred Stock and all other outstanding shares
and other  securities which are convertible into Common Stock, and upon exercise
of any outstanding rights or options to purchase Common Stock.



<PAGE>


      (c) In  connection  with  the  conversion  of  shares  of  $5.50  Dividend
Cumulative Convertible Preferred Stock into Common Stock, no fractions of shares
of $5.50 Dividend  Cumulative  Convertible  Preferred  Stock nor of Common Stock
shall be issued;  and, in lieu thereof,  non-dividend  bearing  non-voting scrip
(exchangeable  when  combined  for full  shares) may be issued,  or the Board of
Directors may make such provisions for the  stockholders in lieu of the issue of
scrip as it may  determine,  including  payment  in cash or sale of stock to the
extent of any  fractions  of shares  and  distribution  of the net  proceeds  or
otherwise.  The Board of Directors may determine and fix the form of such scrip,
whether bearer or otherwise,  the  denomination  thereof,  the expiration  dates
thereof,  any provisions  permitting sale of the full shares of which such scrip
is exchangeable  for the account of the holder of such scrip (or in lieu of sale
of such full shares,  provisions  for the  determination  of the value  thereof,
based upon  quotations  therefor on the New York Stock Exchange on any specified
date or dates or based  upon any other  method or methods  of  determination  of
value, and for payment of the value so determined to the holders of such scrip),
and any other terms or provisions of such scrip as it may deem advisable.

      (8) Retirement.  Shares of $5.50 Dividend Cumulative Convertible Preferred
Stock converted shall not be reissued.

      (9) Ranking. All shares of $5.50 Dividend Cumulative Convertible Preferred
Stock shall be of equal rank in respect of the preference as to dividends and to
preferential  payments  upon the  liquidation,  distribution  or sale of assets,
dissolution  or winding up of the  Corporation  with all shares of the Preferred
Stock without nominal or par value,  the Preferred Stock with par value,  the 5%
Cumulative  Preferred Stock, the $4.50 Dividend  Cumulative  Preferred Stock and
the $4.30 Dividend Cumulative Preferred Stock.

      (10)  Amendment.  While any of the $5.50 Dividend  Cumulative  Convertible
Preferred  Stock is outstanding  the  Corporation  shall not alter or change the
preferences,   special  rights  or  powers  of  the  $5.50  Dividend  Cumulative
Convertible  Preferred  Stock  so as to  adversely  affect  the  $5.50  Dividend
Cumulative Convertible Preferred Stock without the affirmative consent (given in
writing or at a meeting duly called for that purpose) of the holders of at least
two-thirds  (2/3rds)  of the  aggregate  number  of  shares  of  $5.50  Dividend
Cumulative Convertible Preferred Stock then outstanding; provided, however, that
the  authorization,  increase in the authorized amount of, or issue of any class
or series  of stock  ranking  on a parity  with the  $5.50  Dividend  Cumulative
Convertible  Preferred Stock as to the payment of dividends and the preferential
distribution of assets shall not be deemed to be such an alteration or change.

      (11)  Consolidation  or Merger.  If at the time any of the $5.50  Dividend
Cumulative Convertible Preferred Stock is outstanding, the Corporation will not,
without the  affirmative  consent  (given in writing or at a meeting duly called
for  that  purpose)  of the  holders  of at  least  two-thirds  (2/3rds)  of the
aggregate number of shares of $5.50 Dividend  Cumulative  Convertible  Preferred
Stock then outstanding, at any time during the conversion period, consolidate or
merge with or into another  corporation  (whether or not the  Corporation is the
surviving  corporation),  or sell  all or  substantially  all of its  assets  to
another  corporation,   unless  in  connection  therewith  lawful  and  adequate
provision is made whereby the holders of $5.50 Dividend  Cumulative  Convertible
Preferred Stock shall receive the right to convert during the conversion  period
into the kind and amount of shares of stock and other  securities to be received
by holders of the number of shares of Common Stock of the Corporation into which
the $5.50  Dividend  Cumulative  Convertible  Preferred  Stock  might  have been
converted  immediately prior to such consolidation,  merger or sale, which right
shall be subject to  adjustment,  as nearly  equivalent as may be practicable to
the adjustments provided for in this Section 3F.



<PAGE>


      G. No  preferential  dividend  shall be paid upon or declared or set apart
for any  share  of  Preferred  Stock  of any  class  or  series  thereof  of the
Corporation for any quarterly or semi-annual  dividend  period,  as the case may
be,  unless  at the same  time a  preferential  dividend  shall be paid  upon or
declared  and set apart for all shares of such  Preferred  Stock of any class or
series thereof then issued and outstanding upon which a dividend is then due and
payable,  and if the  amount of any  preferential  dividend  declared  upon such
Preferred Stock shall be less than the full  preferential  dividend then due and
payable  upon all such  Preferred  Stock of all classes and series  thereof then
issued and outstanding,  the preferential dividend paid upon the several classes
or series thereof of such Preferred Stock then issued and  outstanding  shall be
proportionate  to the amount so due and  payable  with  respect to such  several
classes and series thereof.

                                  COMMON STOCK

      H. (1)  Dividends.  After the  requirements  with respect to  preferential
dividends upon the Preferred  Stock of all classes and series thereof shall have
been met and after the Corporation shall have complied with all requirements, if
any,  with respect to the setting  aside of sums as a sinking fund or redemption
or purchase  account for the benefit of any class or series thereof of Preferred
Stock, then and not otherwise,  the holders of Common Stock shall be entitled to
receive  such  dividends  as may be  declared  from time to time by the Board of
Directors.

      (2) Liquidation,  Dissolution or Winding Up. After distribution in full of
the  preferential  amounts to be  distributed  to the holders of all classes and
series thereof of Preferred Stock then outstanding in the event of the voluntary
or involuntary  liquidation,  dissolution or winding up of the Corporation,  the
holders of the Common  Stock  shall be  entitled  to receive  all the  remaining
assets of the Corporation available for distribution to its stockholders ratably
in proportion to the number of shares of Common Stock held by them respectively,
subject  to the  rights of  holders  of $5.50  Dividend  Cumulative  Convertible
Preferred Stock to share in such distribution to the extent specified in Section
3F(2).

      (3) Voting  Rights.  Each  holder of Common  Stock  shall have one vote in
respect of each share of such stock held by him.

      I. A liquidation,  dissolution or winding up of the  Corporation,  as such
terms are used in this Article IV, shall not be deemed to be occasioned by or to
include  (a) any  consolidation  or merger of the  Corporation  with or into any
other  corporation or corporations,  or (b) any sale,  lease,  exchange or other
transfer of any or all of the assets of the  Corporation to another  corporation
or  corporations  pursuant to a plan which shall  provide for the receipt by the
Corporation  or  its   stockholders,   as  all  or  the  major  portion  of  the
consideration for such sale, lease,  exchange or transfer, of securities of such
other  corporation or  corporations  of any company or companies  subsidiary to,
controlled by, or affiliated with such other corporation or corporations.

      J. The amount of the authorized  stock of the  Corporation of any class or
classes may be  increased  or  decreased,  in the manner  provided by law, by an
affirmative vote of holders of the stock of the Corporation having a majority of
the voting power.

      The Board of Directors of the  Corporation may authorize the issuance from
time to time,  without any vote or other action by  stockholders,  of all or any
shares of stock of the  Corporation  of any class now or  hereafter  authorized,
part paid receipts or allotment  certificates in respect of any such shares, and
any securities  convertible  into or  exchangeable  for any such shares (whether
such shares,  receipts,  certificates  or  securities  be unissued or issued and
thereafter acquired by the Corporation), in each case to such

<PAGE>


      corporations,  associations,  partnerships,  firms, individuals or others,
for such  consideration and on such terms as the Board of Directors from time to
time in its discretion lawfully may determine. In the discretion of the Board of
Directors any such shares, receipts, certificates, securities, warrants or other
instruments  may be  offered  from time to time to the  holders  of any class or
classes of stock of the  Corporation  to the  exclusion of the holders of any or
all other classes of stock at the time outstanding.

      K. No holder of any stock of the Corporation of any class now or hereafter
authorized  shall have any right as such holder (other than such right,  if any,
as the  Board  of  Directors  in its  discretion  may  determine)  to  purchase,
subscribe for or otherwise  acquire any share of stock of the Corporation of any
class now or  hereafter  authorized,  or any part paid  receipts,  or  allotment
certificates in respect of any such shares,  or any securities  convertible into
or  exchangeable  for any such  shares,  or any  warrants  or other  instruments
evidencing rights or options to subscribe for, purchase or otherwise acquire any
such shares, whether such shares, receipts,  certificates,  securities, warrants
or other  instruments  be  unissued  or issued and  thereafter  acquired  by the
Corporation.

      L.  Except  for any  action  which  may be taken  solely  upon the vote or
consent  in writing of holders  of  Preferred  Stock or any series  thereof,  no
action  required  to be taken or which  may be taken at any  annual  or  special
meeting of  stockholders  of the  Corporation may be taken by consent in writing
without a meeting of stockholders.

      M.  Pursuant to the  authority  contained in this Article IV, the Board of
Directors adopted resolutions  authorizing the creation and issuance of a series
of Series A Participating Preferred Stock, which such resolutions were set forth
in a  Certificate  of  Designations,  Preferences  and  Rights  filed  with  the
Secretary  of State on  November  20,  1987 and  amended  on April 12,  1991 and
November 29, 1993. A copy of such resolutions is attached to this Certificate of
Incorporation as Exhibit A and is incorporated herein by reference.

                                 ARTICLE V

      Section 1. Elections of directors need not be by ballot unless the By-laws
of the Corporation shall so provide.

      Section 2.  Advance  notice of  nominations  for the election of directors
shall be given in the manner and to the extent  provided  in the  By-laws of the
Corporation.

      Section 3. At any meeting of the stockholders,  duly called as provided in
the By-laws,  any director or directors may, by the affirmative  vote of holders
of  outstanding  shares of stock of the  Corporation  entitled  to vote  thereon
having 80% or more of the voting  power,  be removed from office  either with or
without  cause and his  successor  or their  successors  may be  elected at such
meeting or a majority of the remaining  directors  may, to the extent  vacancies
are not filled by such election,  fill any vacancy or vacancies  created by such
removal;  provided,  however, that any director who shall have been elected by a
class vote of the  holders of any class of stock  pursuant  to Article IV hereof
may be removed,  and any such vacancy created  thereby shall be filled,  only in
the manner specified in such Article IV.

      Section 4. In  furtherance  and not in limitation  of the power  conferred
upon the Board of Directors  by law, the Board of Directors  shall have power to
make,  adopt,  alter,  amend  and  repeal  from  time  to  time  By-laws  of the
Corporation by the affirmative vote of at least a majority of the whole Board of
Directors  subject to the right of  stockholders  entitled to vote with  respect
thereto to make,  alter and repeal By-laws by the affirmative vote of holders of
outstanding  shares of stock of the Corporation  entitled to vote thereon having
80% or more of the voting power.



<PAGE>


                                 ARTICLE VI

      Whenever a compromise or arrangement is proposed  between the  Corporation
and its creditors or any class of them and/or  between the  Corporation  and its
stockholders  or any class of them, any court of equitable  jurisdiction  within
the  State  of  Delaware  may,  on  the  application  in a  summary  way  of the
Corporation or of any creditor or stockholder  thereof or on the  application of
any receiver or receivers  appointed for the Corporation under the provisions of
Section  291 of the General  Corporation  Law of the State of Delaware or on the
application of trustees in dissolution or of any receiver or receivers appointed
for  the  Corporation  under  the  provisions  of  Section  279 of  the  General
Corporation  Law of the State of Delaware  order a meeting of the  creditors  or
class of creditors,  and/or of the  stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs.  If a majority  in number  representing  three-fourths  in value of the
creditors  or  class  of  creditors,  and/or  of the  stockholders  or  class of
stockholders of the Corporation,  as the case may be, agree to any compromise or
arrangement and to any  reorganization of the Corporation as consequence of such
compromise  or  arrangement,  the said  compromise or  arrangement  and the said
reorganization  shall, if sanctioned by the court to which the said  application
has been made, be binding on all the creditors or class of creditors,  and/or on
all the stockholders or class of stockholders,  of the Corporation,  as the case
may be, and also on the Corporation.

                                ARTICLE VII

      The Corporation  shall be deemed,  for all purposes,  to have reserved the
right to  amend,  alter,  change  or  repeal  any  provision  contained  in this
Certificate  of  Incorporation  in the manner  now or  hereafter  prescribed  by
statute and all rights hereunder conferred upon stockholders are granted subject
to such reservations;  provided, however, that so long as any share of the $4.50
Dividend  Cumulative  Preferred  Stock  or  any  share  of  the  $4.30  Dividend
Cumulative  Preferred  Stock  or any  share  of the  $5.50  Dividend  Cumulative
Convertible  Preferred Stock is outstanding,  this  Certificate of Incorporation
shall not be amended,  and the Board of Directors shall not have authority under
Section 3A of  Article IV hereof,  (a) to create any class or series of stock of
the Corporation which shall, or (b) to reclassify any authorized class or series
of stock of the  Corporation  to,  rank prior to the $4.50  Dividend  Cumulative
Preferred  Stock or the $4.30 Dividend  Cumulative  Preferred Stock or the $5.50
Dividend Cumulative  Convertible Preferred Stock in respect of the preference as
to dividends and to payments upon  liquidation,  distribution or sale of assets,
dissolution or winding up of the  Corporation  without the  affirmative  consent
(given in writing or at a meeting  duly called for that  purpose) of the holders
of at least  two-thirds  (2/3rds)  of the  aggregate  number  of shares of $4.50
Dividend Cumulative  Preferred Stock, $4.30 Dividend Cumulative  Preferred Stock
and $5.50 Dividend Cumulative  Convertible Preferred Stock,  respectively,  then
outstanding,  each voting  separately as a class;  and further provided that the
provisions  of this  Article  VII  are  subject  to any  requirement  under  the
provisions  of Article IV hereof of a consent of the  holders of such  shares or
any thereof under any other circumstances.

                                ARTICLE VIII

      Section 1. Any business combination (as hereinafter defined) shall require
only such affirmative vote as is required by law and any other provision of this
Certificate  of  Incorporation  if all of the  following  conditions  have  been
satisfied:

         (i) The  aggregate  amount  of the cash and the  fair  market  value of
      consideration  other  than cash to be  received  per share by  holders  of
      Common Stock in any business  combination shall be in the same form and of
      the same kind as the consideration paid by the Interested  Stockholder (as
      hereinafter  defined) in acquiring its initial shares  representing 20% of
      the  voting  power and shall be at least  equal to the  highest  per share
      price  (including  brokerage  commissions,  transfer  taxes and soliciting
      dealers'  fees) paid by such  Interested  Stockholder  in acquiring any of
      this Corporation's Common Stock;


<PAGE>



         (ii)  After  becoming  an  Interested  Stockholder  and  prior  to  the
      consummation of any business combination,  (A) such Interested Stockholder
      shall not have acquired any newly issued shares of capital stock, directly
      or  indirectly,   from  this   Corporation   (except  upon  conversion  of
      convertible  securities  acquired by it prior to  becoming  an  Interested
      Stockholder or upon compliance with the provisions of this Article VIII or
      as a result of a pro rata  stock  dividend  or stock  split)  and (B) such
      Interested  Stockholder  shall not have received the benefit,  directly or
      indirectly  (except  proportionately  as  a  stockholder)  of  any  loans,
      advances, guarantees, pledges or other financial assistance or tax credits
      provided  by  this  Corporation,   or  made  any  major  changes  in  this
      Corporation's business or equity capital structure; and

         (iii)  A  proxy  statement   responsive  to  the  requirements  of  the
      Securities  Exchange Act of 1934,  whether or not this Corporation is then
      subject to such requirements,  shall be mailed to the stockholders of this
      Corporation  for the  purpose of  soliciting  stockholder  approval of any
      business combination and shall contain at the front thereof in a prominent
      place any  recommendations  as to the advisability (or  inadvisability) of
      the business  combination  which the continuing  directors (as hereinafter
      defined) may choose to state.

      Section 2. If the  provisions  of Section 1 of this  Article VIII have not
been satisfied,  any business  combination shall require the affirmative vote of
holders of outstanding Voting Shares (as hereinafter defined) of the Corporation
entitled to vote thereon having 80% or more of the voting power,  considered for
the purpose of this Article VIII as one class.  Such  affirmative  vote shall be
required  notwithstanding  the fact that no vote may be  required,  or that some
lesser  percentage may be specified by law or in any agreement with any national
securities exchange or otherwise.

      Section 3. The  provisions  of Sections 1 and 2 of this Article VIII shall
not be  applicable to any  particular  business  combination,  and such business
combination  shall require only such affirmative vote, if any, as is required by
law and any  other  provision  of this  Certificate  of  Incorporation,  if such
business  combination  (a)  has  been  approved  prior  to its  consummation  by
two-thirds  of  the  continuing  directors,  or  (b)  constitutes  a  merger  or
consolidation  of the Corporation  with, or any sale or lease to the Corporation
or any Subsidiary (as hereinafter defined) thereof of any assets of, or any sale
or lease by the  Corporation or any Subsidiary  thereof of any of its assets to,
any corporation of which a majority of the outstanding  shares of all classes of
stock  entitled  to vote in  elections  of  directors  is  owned  of  record  or
beneficially by the Corporation and its Subsidiaries,  provided that this clause
(b) shall not apply to any  transaction  to which any Affiliate (as  hereinafter
defined) of an Interested Stockholder is a party.

      Section 4. For the purposes of this Article VIII:

      (a) The term  "business  combination"  as used in this  Article VIII shall
mean any  transaction  which is  referred  to in any one or more of clauses  (i)
through (v) of paragraph (a) of this Section 4:

         (i) any merger or  consolidation  of the  Corporation or any Subsidiary
      with or into (A) any Interested  Stockholder or (B) any other  corporation
      (whether  or not  itself an  Interested  Stockholder)  which,  immediately
      before is, or after such merger or consolidation, would be an Affiliate of
      an Interested Stockholder, or

         (ii) any sale, lease,  exchange,  mortgage,  pledge,  transfer or other
      disposition (in one transaction or a series of related transactions) to or
      with  any  Interested  Stockholder  or any  Affiliate  of  any  Interested
      Stockholder of any assets of the  Corporation or any Subsidiary  when such
      assets have an aggregate fair market value of $25,000,000 or more, or



<PAGE>


         (iii) the  issuance or transfer to any  Interested  Stockholder  or any
      Affiliate  of  any  Interested  Stockholder  by  the  Corporation  or  any
      Subsidiary (in one transaction or a series of  transactions) of any equity
      securities  of  the  Corporation  or  any  Subsidiary  where  such  equity
      securities have an aggregate fair market value of $10,000,000 or more, or

         (iv)  the  adoption  of  any  plan  or  proposal  for  the  liquidation
      or  dissolution  of  the Corporation, or

         (v) any  reclassification  of securities  (including  any reverse stock
      split),  or  recapitalization  of  the  Corporation,   or  any  merger  or
      consolidation  of the  Corporation  with  any of its  Subsidiaries  or any
      similar transaction (whether or not with or into or otherwise involving an
      Interested Stockholder) which has the effect,  directly or indirectly,  of
      increasing the proportionate  share of the outstanding shares of any class
      of equity or convertible  securities of the  Corporation or any Subsidiary
      which is directly or indirectly owned by any Interested Stockholder or any
      Affiliate of any Interested Stockholder.

      (b) A  "person"  shall mean any  individual,  firm,  corporation  or other
entity.

      (c)  "Interested  Stockholder"  shall  mean,  in respect  of any  business
combination,  any person (other than the  Corporation or any  Subsidiary) who or
which, as of the record date for the  determination of stockholders  entitled to
notice of and to vote on such business combination,  or immediately prior to the
consummation of any such transaction:

         (i) is the  beneficial  owner (as  hereinafter  provided),  directly or
      indirectly,  of more than 20% of the Voting Shares of the Corporation or a
      Subsidiary, or

         (ii) is an  assignee  of or has  otherwise  succeeded  to any  share of
      capital  stock of the  Corporation  or a Subsidiary  which was at any time
      within  two  years  prior  thereto  beneficially  owned by any  Interested
      Stockholder,  and such assignment or succession shall have occurred in the
      course of a transaction or series of  transactions  not involving a public
      offering within the meaning of the Securities Act of 1933.

      (d) A person shall be the "beneficial owner" of any Voting Shares:

         (i) which  such  person or any of its  Affiliates  and  Associates  (as
      hereinafter defined) beneficially own, directly or indirectly, or

         (ii) which such person or any of its  Affiliates or Associates  has (A)
      the right to acquire  (whether such right is  exercisable  immediately  or
      only after the passage of time), pursuant to any agreement, arrangement or
      understanding or upon the exercise of conversion rights,  exchange rights,
      warrants or options,  or  otherwise,  or (B) the right to vote pursuant to
      any agreement, arrangement or understanding or

         (iii) which are  beneficially  owned,  directly or  indirectly,  by any
      other  person  with  which  such  first  mentioned  person  or  any of its
      Affiliates or Associates has any agreement,  arrangement or  understanding
      for the purpose of acquiring,  holding,  voting or disposing of any shares
      of capital stock of the Corporation or a Subsidiary, as the case may be.

      (e)  "Voting  Shares"  when  used with  respect  to the  Corporation  or a
Subsidiary  shall mean shares of such  corporation  having general voting power.
The outstanding  Voting Shares shall include shares deemed owned by a beneficial
owner through  application  of Section 4(d) of this Article VIII above but shall
not include any other  Voting  Shares  which may be issuable to any other person
pursuant to any agreement,  or upon exercise of conversion  rights,  warrants or
options, or otherwise.


<PAGE>



      (f)  "Affiliate" or "Associate"  shall have the respective  meanings given
those  terms in Rule  12b-2 of the  General  Rules  and  Regulations  under  the
Securities Exchange Act of 1934, as in effect on December 31, 1982.

      (g)  "Subsidiary"  shall mean any  corporation  of which a majority of any
class of equity  security  (as defined in Rule  3a11-1 of the General  Rules and
Regulations under the Securities  Exchange Act of 1934, as in effect on December
31,  1982) is owned,  directly  or  indirectly,  by the  Corporation;  provided,
however,  that for the purposes of the definition of Interested  Stockholder set
forth in Section 4(c) of this Article  VIII,  the term  "Subsidiary"  shall mean
only a  corporation  of which a  majority  of each class of equity  security  is
owned, directly or indirectly, by the Corporation.

      (h)  "Continuing  director"  shall  mean a person  who was a member of the
Board of Directors of the Corporation  elected by the stockholders  prior to the
date as of which the  Interested  Stockholder  acquired  in excess of 20% of the
Voting Shares of the Corporation or a Subsidiary.

      Section 5. A majority of the continuing directors shall have the power and
duty to  determine  for  the  purposes  of this  Article  VIII on the  basis  of
information known to them, (a) the number of Voting Shares beneficially owned by
any person,  (b) whether a person is an Affiliate  or Associate of another,  (c)
whether a person has an agreement,  arrangement or understanding with another as
to the matters referred to in Section 4(d) of this Article VIII, (d) whether the
assets of the  Corporation or any Subsidiary have an aggregate fair market value
of  $25,000,000  or more,  or (e) whether  the  consideration  received  for the
issuance or transfer of securities by the  Corporation  or any Subsidiary has an
aggregate fair market value of $10,000,000 or more.

      Section 6.  Nothing  contained  in this Article VIII shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.

                                 ARTICLE IX

      Notwithstanding  any other provision of this  Certificate of Incorporation
or the By-laws of the Corporation (and in addition to any other vote that may be
required  by  law,  this  Certificate  of  Incorporation  or the  By-laws),  the
affirmative  vote of holders of outstanding  shares of stock of the  Corporation
entitled to vote thereon having 80% or more of the voting power  (considered for
this  purpose  as one class)  shall be  required  to amend,  alter or repeal any
provision  of Article IV Section 3L,  Article V Section 2,  Article V Section 3,
Article V Section 4,  Article  VIII,  or this Article IX of the  Certificate  of
Incorporation  or to  amend,  alter or  repeal  any  By-law  or  By-laws  of the
Corporation.

                                ARTICLE X

      Section 1. A Director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a  Director,  except to the extent  such  exemption  from  liability  or
limitation  thereof is not permitted  under the General  Corporation  Law of the
State of Delaware as the same exists or as may hereafter be amended.

      Section 2. If the  General  Corporation  Law of the State of  Delaware  is
amended  hereafter to authorize  the further  elimination  or  limitation of the
liability of  directors,  then the  liability  of a director of the  Corporation
shall be eliminated or limited to the fullest  extent  authorized by the General
Corporation Law of the State of Delaware, as so amended.



<PAGE>


      Section 3. Any repeal or  modification of this Article shall not adversely
affect  any  right or  protection  of a  Director  of the  Corporation  existing
hereunder with respect to any act or omission  occurring prior to or at the time
of such repeal or modification.


IN WITNESS  WHEREOF,  the  Corporation  has caused this Restated  Certificate of
Incorporation to be signed by Finn M. W. Caspersen, its Chairman of the Board of
Directors, and attested by Eileen F. Caulfield, its Corporate Secretary, whereby
said Finn M. W.  Caspersen  affirms,  under the penalties of perjury,  that this
Restated Certificate of Incorporation is the act and deed of the Corporation and
that the facts stated herein are true, this 1st day of June, 1994.

                                            BENEFICIAL CORPORATION





                                            By         /s/ Finn M.W. Caspersen
                                            -----------------------------------
                                            Chairman of the Board of Directors
   Attest:


/s/ Eileen F. Caulfield
  Corporate Secretary





[Corporate Seal]




<PAGE>


                                                                      Exhibit A

Certificate of Designations, Preferences and Rights of Series A Participating
                Preferred Stock of Beneficial Corporation

 Pursuant to Section 151 of the General Corporation Law of the State of Delaware

      I, Finn M.W. Caspersen,  Chairman of the Board and Chief Executive Officer
of  Beneficial  Corporation,  a  corporation  organized  and existing  under the
General  Corporation  Law of the  State  of  Delaware,  in  accordance  with the
provisions of Section 151 thereof DO HEREBY CERTIFY:

      That  pursuant to the authority  conferred  upon the Board of Directors by
the Restated Certificate of Incorporation of said Corporation, the said Board of
Directors,  by  resolutions  adopted on  November  11,  1987,  April 1, 1991 and
November 18, 1993,  designated  570,000  shares of the Preferred  Stock with par
value as Series A Participating Preferred Stock.

      RESOLVED,  that pursuant to the authority vested in the Board of Directors
of  this   Corporation  in  accordance  with  the  provisions  of  its  Restated
Certificate of Incorporation,  a series of Preferred Stock with par value of the
Corporation  be and it hereby is created,  and that the  designation  and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series,  and the  qualifications,
limitations or restrictions thereof are as follows:

       Section 1.  Designation  and Amount.  The shares of such series  shall be
designated as "Series A Participating  Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting such series shall be 570,000.

      Section 2.  Dividends and Distributions.

      (A) Subject to the provisions for adjustment  hereinafter  set forth,  the
holders of shares of Series A  Preferred  Stock  shall be  entitled  to receive,
when,  as and if  declared  by the  Board  of  Directors  out of  funds  legally
available for the purpose,

         (i) cash dividends in an amount per share (rounded to the nearest cent)
      equal to 100 times the  aggregate  per share amount of all cash  dividends
      declared or paid on the Common  Stock,  par value $1.00 per share,  of the
      Corporation (the "Common Stock") and

         (ii) a preferential cash dividend ("Preferential  Dividends"),  if any,
      on the last day of March, June,  September and December in each year (each
      such  date  being  referred  to herein as a  "Quarterly  Dividend  Payment
      Date"),  commencing on the first Quarterly Dividend Payment Date after the
      first  issuance  of a share or  fraction  of a share of Series A Preferred
      Stock,  in an amount equal to $25.00 per share of Series A Preferred Stock
      less the per share amount of all cash  dividends  declared on the Series A
      Preferred  Stock  pursuant  to  clause  (i) of  this  sentence  since  the
      immediately  preceding Quarterly Dividend Payment Date or, with respect to
      the first Quarterly Dividend Payment Date, since the first issuance of any
      share or fraction of a share of Series A Preferred Stock.

      (B) In the event the Corporation  shall, at any time after the issuance of
any  share  or  fraction  of a share  of  Series  A  Preferred  Stock,  make any
distribution on the shares of Common Stock of the Corporation, whether by way of
a dividend or a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Corporation or otherwise, which is payable in cash or
any debt  security,  debt  instrument,  real or  personal  property or any other
property (other than cash dividends referred to in Section 2(A) and other than a
distribution of shares of Common Stock or other capital stock of the Corporation
and

<PAGE>


      other than a distribution  of rights or warrants to acquire any such share
(including  any debt  security  convertible  into or  exchangeable  for all such
shares) at a price less than the  Current  Market  Price (as  defined in Section
7(D)  (of such  share),  then  and in each  such  event  the  Corporation  shall
simultaneously pay on each then outstanding share of Series A Preferred Stock of
the  Corporation  a  distribution,  in like kind,  of 100 times  (subject to the
provisions for adjustment  hereinafter  set forth) such  distribution  paid on a
share of Common Stock. The dividends and distributions on the Series A Preferred
Stock to which  holders  thereof are entitled  pursuant to clause (i) of Section
2(A) and pursuant to the first  sentence of this  Section  2(B) are  hereinafter
referred  to as  "Participating  Dividends"  and the  multiple  of such cash and
non-cash  dividends on the Common Stock  applicable to the  determination of the
Participating Dividends, which shall be 100 initially but shall be adjusted from
time  to  time  as  hereinafter  provided,  is  hereinafter  referred  to as the
"Dividend Multiple". In the event the Corporation shall at any time after August
22, 1996 (the "Rights Declaration Date") declare or pay any dividend or make any
distribution  on Common  Stock  payable in shares of Common  Stock,  or effect a
subdivision  or split or a  combination,  consolidation  or reverse split of the
outstanding  shares of Common Stock into a greater or lesser number of shares of
Common Stock, then in each such case the Dividend Multiple thereafter applicable
to the  determination of the amount of Participating  Dividends which holders of
shares of Series A Preferred  Stock  shall be  entitled to receive  shall be the
Dividend  Multiple  applicable  immediately  prior to such event multiplied by a
fraction  the  numerator  of which is the  number  of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

      (C)  When,  as  and  if  the  Corporation  shall  declare  a  dividend  or
distribution on the Common Stock in respect of which a Participating Dividend is
required  to be  paid,  the  Corporation  shall  at  the  same  time  declare  a
Participating  Dividend  on the Series A  Preferred  Stock.  No cash or non-cash
dividend  on the Common  Stock in respect of which a  Participating  Dividend is
required to be paid shall be paid or set aside for  payment on the Common  Stock
unless a  Participating  Dividend in respect of such dividend or distribution on
the Common Stock shall be simultaneously  paid, or set aside for payment, on the
Series A Preferred  Stock. In the event no dividend or  distribution  shall have
been  declared  on the Common  Stock  during the period  between  any  Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
Preferential  Dividend on the Series A Preferred  Stock  shall  nevertheless  be
payable, when, as and if declared by the Board of Directors,  on such subsequent
Quarterly Dividend Payment Date.

      (D)  Preferential  Dividends  shall begin to accrue and be  cumulative  on
outstanding  shares of Series A  Preferred  Stock  from the  Quarterly  Dividend
Payment  Date  next  preceding  the  date of issue of such  shares  of  Series A
Preferred  Stock.  Accrued  but  unpaid  Preferential  Dividends  shall not bear
interest.  Preferential Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total  amount of such  dividends  at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.  The Board of Directors may fix a
record  date for the  determination  of holders of shares of Series A  Preferred
Stock  entitled  to  receive  payment  of a dividend  or  distribution  declared
thereon,  which  record date shall be no more than 60 days prior to the relevant
Quarterly Dividend Payment Date.

      (E) If on any Quarterly  Dividend Payment Date the Corporation's  Restated
Certificate  of  Incorporation  or  applicable  law shall  limit  the  amount of
Preferential  Dividends  which may be paid on the Series A Preferred Stock to an
amount less than that provided above, such  Preferential  Dividends will be paid
in the maximum  permissible  amount and the shortfall  from the amount  provided
above  shall be a  cumulative  dividend  requirement  and be carried  forward to
subsequent Quarterly Dividend Payment Dates.

      Section  3.  Voting  Rights. The holders  of shares of Series A  Preferred
Stock  shall  have the following voting rights:



<PAGE>


      (A) Subject to the provision for adjustment  hereinafter  set forth,  each
share of Series A Preferred  Stock shall entitle the holder thereof to 100 votes
on all matters  submitted to a vote of the stockholders of the Corporation.  The
number of votes which a holder of Series A Preferred  Stock is entitled to cast,
as the  same may be  adjusted  from  time to time as  hereinafter  provided,  is
hereinafter  referred to as the "Vote  Multiple".  In the event the  Corporation
shall at any time after the Rights  Declaration Date declare or pay any dividend
or make any  distribution  on Common Stock payable in shares of Common Stock, or
effect a subdivision or split or combination,  consolidation or reverse split of
the outstanding shares of Common Stock into a greater or lesser number of shares
of Common Stock, then in each such case the Vote Multiple thereafter  applicable
to the determination of the number of votes per share to which holders of shares
of Series A Preferred Stock shall be entitled immediately after such event shall
be adjusted by multiplying the Vote Multiple  immediately prior to such event by
a  fraction  the  numerator  of which is the  number of  shares of Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

      (B) Except as otherwise provided in this Certificate of Designations or by
law, the holders of shares of Series A Preferred Stock, the holders of shares of
Common Stock and the holders of any other  capital stock of the  Corporation  at
the time  entitled  thereto  shall  vote  together  as one class on all  matters
submitted to a vote of stockholders  of the  Corporation,  and,  notwithstanding
that the holders of Series A Preferred Stock, voting as a class, may be entitled
to elect two  directors  as  hereinafter  provided,  they shall be  entitled  to
participate with the Common Stock (or any other capital stock as aforesaid),  in
the election of any other directors.

      (C) In case at any time six or more full quarterly  Preferential Dividends
(whether consecutive or not) on the Series A Preferred Stock shall be in arrears
(otherwise than by reason of limitations on the payment thereof contained in the
Corporation's  Restated  Certificate of Incorporation as in effect on the Rights
Declaration  Date),  then during the period  (hereinafter  in this  Section 3(C)
called the "Voting  Period")  commencing with such time and ending with the time
when all arrears in  dividends  on the Series A Preferred  Stock shall have been
paid and the full dividend on the Series A Preferred  Stock for the then current
Quarterly  Dividend  Period  shall have been  declared and paid or set aside for
payment,  at any meeting of the  stockholders  of the  Corporation  held for the
election  of  directors  during  the  Voting  Period,  the  holders  of Series A
Preferred Stock present in person or represented by proxy at said meeting, shall
be entitled, together with the holders of all other series of the class of stock
of the Corporation  designated "Preferred Stock with par value" then outstanding
as to which the right to vote with the holders of Series A  Preferred  Stock for
the election of directors  in the event of dividend  arrearages  shall have been
granted  (the Series A Preferred  Stock  together  with all such other series of
"Preferred Stock with par value" then outstanding being collectively referred to
herein as "Par Value  Preferred  Stock"),  voting as a class to the exclusion of
the  holders  of all other  classes  of stock of the  Corporation,  to elect two
directors of the Corporation,  each share of Par Value Preferred Stock entitling
the holder to one vote.

      (D) Any  director  who shall  have been  elected  by  holders of Par Value
Preferred Stock or by any director so elected as herein contemplated may, at any
time during a Voting Period, be removed for cause by, and without cause only by,
the affirmative  votes of the holders of record of a majority of the outstanding
shares  of Par Value  Preferred  Stock,  voting  as a class,  given at a special
meeting of such stockholders called for the purpose,  and any vacancy thereby or
otherwise  created may be filled during such Voting Period by the holders of Par
Value Preferred Stock present in person or represented by proxy at such meeting.
Any  director  to be elected by the Board of  Directors  of the  Corporation  to
replace a director elected by holders of Par Value Preferred Stock or elected by
a director  as in this  sentence  provided  shall be  elected  by the  remaining
director theretofore elected by the holders of Par Value Preferred Stock. At the
end of the Voting Period the holders of the Par Value  Preferred  Stock shall be
automatically divested of all voting power vested in them under Section 3(C) but
subject  always to the  subsequent  vesting  hereunder  of  voting  power in the
holders  of Par Value  Preferred  Stock in the event of any  similar  default or
defaults thereafter.


<PAGE>


      (E) Except as set forth in this Certificate of Designations or as required
by law,  holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required  (except to the extent they are entitled
to vote with  holders of Common  Stock or holders of any other  class of capital
stock as set forth herein) for taking any corporate action.

      Section 4. Certain Restrictions.

      (A)  Whenever  quarterly  dividends or other  dividends  or  distributions
payable on the Series A Preferred  Stock as provided in Section 2 are in arrears
(otherwise than by reason of limitations on the payment thereof contained in the
Corporation's  Restated  Certificate of Incorporation as in effect on the Rights
Declaration  Date),  thereafter  and until all accrued and unpaid  dividends and
distributions,  whether or not declared,  on shares of Series A Preferred  Stock
outstanding shall have been paid in full, the Corporation shall not

         (i) declare or pay  dividends on, make any other  distributions  on, or
      redeem or purchase or otherwise  acquire for  consideration  any shares of
      stock  ranking  junior  (either  as  to  dividends  or  upon  liquidation,
      dissolution or winding up) to the Series A Preferred Stock;

         (ii) except as permitted by subparagraph (iii) of this Section 4(A) and
      except for the  redemption  of the  Corporation's  9.25% Series  Preferred
      Stock, redeem or purchase or otherwise acquire for consideration shares of
      any stock ranking on a parity (either as to dividends or upon liquidation,
      dissolution  or winding  up) with the Series A Preferred  Stock,  provided
      that the Corporation may at any time redeem, purchase or otherwise acquire
      shares of any such parity stock in exchange for shares of any stock of the
      Corporation  ranking junior  (either as to dividends or upon  dissolution,
      liquidation or winding up) to the Series A Preferred Stock; or

         (iii)  purchase or otherwise  acquire for  consideration  any shares of
      Series A Preferred  Stock, or any shares of stock ranking on a parity with
      the Series A Preferred  Stock,  except in accordance with a purchase offer
      made  in  writing  or by  publication  (as  determined  by  the  Board  of
      Directors)  to all holders of all such shares upon such terms as the Board
      of Directors,  after consideration of the respective annual dividend rates
      and other relative  rights and  preferences  of the respective  series and
      classes,  shall  determine in good faith will result in fair and equitable
      treatment among the respective series or classes.

      (B) The Corporation  shall not permit any subsidiary of the Corporation to
purchase  or  otherwise  acquire  for  consideration  any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire shares at such time and in such manner.

      (C) The Corporation shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights  Agreement
dated as of November 11, 1987  between the  Corporation  and Morgan  Shareholder
Services  Trust  Company,  a copy of which is on file with the  Secretary of the
Corporation  at its principal  executive  office and shall be made  available to
stockholders of record without charge upon written request therefor addressed to
said Secretary.  Notwithstanding  the foregoing  sentence,  nothing contained in
this Certificate of Designations shall prohibit or restrict the Corporation from
issuing for any purpose any series of preferred stock with rights and privileges
similar to or different from those of the Series A Preferred Stock.



<PAGE>


      Section  5.  Reacquired  Shares.  Any shares of Series A  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and cancelled promptly after the acquisition  thereof. All such
shares upon their  retirement shall resume the status of authorized but unissued
shares of "Preferred  Stock with par value,"  without  designation as to series,
and may be reissued as part of a new series of "Preferred  Stock with par value"
to be created by resolution or resolutions of the Board of Directors.

      Section 6. Liquidation,  Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made

         (i) to the  holders  of shares of stock  ranking  junior  (either as to
      dividends or upon liquidation,  dissolution or winding up) to the Series A
      Preferred Stock unless,  prior thereto,  the holders of shares of Series A
      Preferred Stock shall have received,  subject to adjustment as hereinafter
      provided,

             (A) $1,000.00 per share, plus an amount equal to accrued and unpaid
      dividends thereon,  whether or not declared,  to the date of such payment,
      or

             (B) if greater,  an amount equal to 100 times the aggregate  amount
      to be distributed per share to holders of Common Stock, or

         (ii)  to the  holders  of  stock  ranking  on a  parity  (either  as to
      dividends or upon liquidation,  dissolution or winding up) with the Series
      A  Preferred  Stock,  except  distributions  made  ratably on the Series A
      Preferred Stock and all other such parity stock in proportion to the total
      amounts to which the  holders of all such  shares are  entitled  upon such
      liquidation,  dissolution or winding up, disregarding for this purpose the
      amounts referred to in clause (i) (B) of this Section 6.

The amount to which  holders of Series A Preferred  Stock may be  entitled  upon
liquidation, dissolution or winding up of the Corporation pursuant to clause (i)
(B) of the foregoing  sentence is hereinafter  referred to as the "Participating
Liquidation  Amount" and the multiple of the amount to be distributed to holders
of shares of Common Stock upon the liquidation, dissolution or winding up of the
Corporation  applicable  pursuant  to said  clause to the  determination  of the
Participating  Liquidation Amount, as said multiple may be adjusted from time to
time as hereinafter  provided,  is hereinafter  referred to as the  "Liquidation
Multiple".  In the  event the  Corporation  shall at any time  after the  Rights
Declaration  Date declare or pay any dividend or make any distribution on Common
Stock  payable in shares of Common Stock,  or effect a  subdivision  or split or
combination,  consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser  number of shares of Common  Stock,  then in each
such case the Liquidation Multiple thereafter applicable to the determination of
the  Participating  Liquidation  Amount to which  holders  of shares of Series A
Preferred  Stock  shall be  entitled  immediately  after such event shall be the
Liquidation Multiple applicable  immediately prior to such event multiplied by a
fraction  the  numerator  of which is the  number  of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

      Section 7. Certain Reclassifications and Other Events.

      (A) In the  event  that all  holders  of  shares  of  Common  Stock of the
Corporation receive after the Rights Declaration Date in respect of their shares
of Common Stock any share of capital  stock of the  Corporation  (other than any
share of Common Stock of the Corporation),  whether by way of  reclassification,
recapitalization,  reorganization,  dividend or other  distribution or otherwise
("Transaction"),  then and in each such event the dividend rights, voting rights
and rights upon the

<PAGE>


      liquidation, dissolution or winding up of the Corporation of the shares of
Series A Preferred  Stock shall be adjusted so that after such event the holders
of Series A  Preferred  Stock  shall be  entitled,  in  respect of each share of
Series A Preferred  Stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment, to

         (i) such additional  dividends as equal the Dividend Multiple in effect
      immediately  prior  to  such  Transaction  multiplied  by  the  additional
      dividends which the holder of a share of Common Stock shall be entitled to
      receive by virtue of the receipt in the Transaction of such capital stock,

         (ii) such additional voting rights as equal the Vote Multiple in effect
      immediately prior to such Transaction  multiplied by the additional voting
      rights  which the holder of a share of Common  Stock  shall be entitled to
      receive by virtue of the receipt in the Transaction of such capital stock,
      and

         (iii) such additional  distributions  upon liquidation,  dissolution or
      winding up of the Corporation as equal the Liquidation  Multiple in effect
      immediately prior to such Transaction  multiplied by the additional amount
      which the holder of a share of Common  Stock  shall be entitled to receive
      upon  liquidation,  dissolution or winding up of the Corporation by virtue
      of the receipt in the Transaction of such capital stock.

as the case may be, all as provided by the terms of such capital stock.

      (B) In the  event  that all  holders  of  shares  of  Common  Stock of the
Corporation receive after the Rights Declaration Date in respect of their shares
of Common Stock any right or warrant to purchase Common Stock (including as such
a right,  for all purposes of this paragraph,  any security  convertible into or
exchangeable  for  Common  Stock) at a  purchase  price per share  less than the
Current Market Price (as hereinafter  defined) of a share of Common Stock on the
date of  issuance  of such  right or  warrant,  then and in each such  event the
dividend rights,  voting rights and rights upon the liquidation,  dissolution or
winding up of the  Corporation  of the shares of Series A Preferred  Stock shall
each be  adjusted  so that  after  such event the  Dividend  Multiple,  the Vote
Multiple and the Liquidation  Multiple shall each be the product of the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple, as the case may be, in
effect immediately prior to such event multiplied by a fraction the numerator of
which  shall be the  number of shares of Common  Stock  outstanding  immediately
before such issuance of rights or warrants plus the maximum  number of shares of
Common Stock which could be acquired upon exercise in full of all such rights or
warrants  and the  denominator  of which shall be the number of shares of Common
Stock  outstanding  immediately  before such issuance of rights or warrants plus
the number of shares of Common  Stock which could be  purchased,  at the Current
Market  Price of the Common Stock at the time of such  issuance,  by the maximum
aggregate  consideration  payable  upon  exercise  in full of all such rights or
warrants.

      (C) In the  event  that all  holders  of  shares  of  Common  Stock of the
Corporation receive after the Rights Declaration Date in respect of their shares
of  Common  Stock  any  right  or  warrant  to  purchase  capital  stock  of the
Corporation (other than shares of Common Stock),  including as such a right, for
all purposes of this paragraph,  any security  convertible  into or exchangeable
for capital stock of the  Corporation  (other than Common Stock),  at a purchase
price per share less than the  Current  Market  Price of such  shares of capital
stock on the date of issuance  of such rights or warrant,  then and in each such
event  the  dividend  rights,   voting  rights  and  rights  upon   liquidation,
dissolution or winding up of the Corporation of the shares of Series A Preferred
Stock  shall each be adjusted so that after such event each holder of a share of
Series A Preferred Stock shall be entitled, in respect of each share of Series A
Preferred  Stock held,  in  addition to such rights in respect  thereof to which
such holder was entitled immediately prior to such event, to receive



<PAGE>


         (i) such additional  dividends as equal the Dividend Multiple in effect
      immediately  prior to such  event  multiplied,  first,  by the  additional
      dividends to which the holder of a share of Common Stock shall be entitled
      upon  exercise  of such right or warrant  by virtue of the  capital  stock
      which could be acquired  upon such  exercise and  multiplied  again by the
      Discount Fraction (as hereinafter defined), and

         (ii) such additional voting rights as equal the Vote Multiple in effect
      immediately  prior to such  event  multiplied,  first,  by the  additional
      voting  rights to which the  holder  of a share of Common  Stock  shall be
      entitled  upon  exercise of such right or warrant by virtue of the capital
      stock which could be acquired upon such exercise and  multiplied  again by
      the Discount Fraction, and

         (iii) such additional  distributions  upon liquidation,  dissolution or
      winding up of the  Company  as equal the  Liquidation  Multiple  in effect
      immediately  prior to such  event  multiplied,  first,  by the  additional
      amount  which the holder of a share of Common  Stock  shall be entitled to
      receive upon  liquidation,  dissolution  or winding up of the  Corporation
      upon  exercise  of such right or warrant  by virtue of the  capital  stock
      which could be acquired  upon such  exercise and  multiplied  again by the
      Discount Fraction.

For purposes of this paragraph,  the "Discount Fraction" shall be a fraction the
numerator of which shall be the difference  between the Current Market Price (as
hereinafter  defined)  of a share of the  capital  stock  subject  to a right or
warrant  distributed to all holders of shares of Common Stock of the Corporation
as contemplated by this paragraph  immediately prior to the distribution thereof
and the  purchase  price per share for such share of capital  stock  pursuant to
such right or warrant and the  denominator  of which shall be the Current Market
Price of a share of such capital stock  immediately prior to the distribution of
such right or warrant.

      D) For purposes of this Section 7, the "Current  Market  Price" of a share
of capital stock of the  Corporation  (including a share of Common Stock) on any
date  shall be deemed to be the  average of the daily  closing  prices per share
thereof  over the 30  consecutive  Trading  Days (as  such  term is  hereinafter
defined) immediately prior to such date; provided,  however,  that, in the event
that such Current  Market Price of any such share of capital stock is determined
during a period which includes any date that is within 30 Trading Days after the
ex-dividend date of (i) a dividend or distribution on stock payable in shares of
such stock or  securities  convertible  into shares of such  stock,  or (ii) any
subdivision,   split,  combination,   consolidation,   reverse  stock  split  or
reclassification  of such stock, then, and in each such case, the Current Market
Price  shall  be  appropriately  adjusted  by  the  Board  of  Directors  of the
Corporation  to  reflect  the  Current  Market  Price of such stock to take into
account ex-dividend trading. The closing price of any day shall be the last sale
price,  regular  way,  or, in case no such  sale  takes  place on such day,  the
average of the  closing  bid and asked  prices,  regular  way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities  listed or admitted to trading on the New York Stock  Exchange or,
if the  shares  are not  listed or  admitted  to  trading  on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national  securities exchange
on which the shares are listed or  admitted to trading or, if the shares are not
listed or  admitted to trading on any  national  securities  exchange,  the last
quoted  price or, if not so  quoted,  the  average of the high bid and low asked
prices in the  over-the-counter  market, as reported by the National Association
of Securities Dealers,  Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or if on any such date the shares are not quoted by any such
organization,  the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the shares selected by the Board of
Directors of the  Corporation.  The term "Trading Day" shall mean a day on which
the  principal  national  securities  exchange on which the shares are listed or
admitted to trading is open for the  transaction  of business  or, if the shares
are not listed or admitted to trading on any national  securities  exchange,  on
which the New York Stock Exchange or such other national  securities exchange as
may be selected by the Board of Directors of the Company is open.  If the shares
are not publicly held or

<PAGE>


      not so listed or traded on any day within  the  period of 30 Trading  Days
applicable to the  determination  of Current  Market Price thereof as aforesaid,
"Current  Market  Price" shall mean the fair market  value  thereof per share as
determined  by  an  independent  investment  banking  firm  experienced  in  the
valuation of securities  selected in good faith by the Board of Directors of the
Corporation or, if no such investment banking firm is in the good faith judgment
of the Board of Directors available to make such determination, in good faith by
the Board of Directors  of the  Corporation.  In either case  referred to in the
foregoing sentence, the determination of Current Market Price shall be described
in a statement filed with the Secretary of the Corporation.

      (E) The Company shall give prompt written notice to each holder of a share
of Series A  Preferred  Stock of the  effect  of any  adjustment  to the  voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the  Company  of such  shares  required  by this  Certificate  of  Designations.
Notwithstanding the foregoing sentence,  the failure of the Company to give such
notice  shall  not  affect  the  validity  of or the  force or  effect of or the
requirement for such adjustment.

      Section 8. Consolidation, Merger, etc. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash  and/or  any  other  property,  then in any such  case  proper
provision  shall be made so that the shares of Series A Preferred Stock shall at
the same time be similarly exchanged for or changed into the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged multiplied by the highest of the Vote Multiple,  the Dividend Multiple
or the  Liquidation  Multiple in effect  immediately  prior to such  event.  The
Company shall not  consummate  any such  consolidation,  merger,  combination or
other  transaction  unless  prior  thereto  the  Company  and the other party or
parties to such  transaction  shall have so provided in any  agreement  relating
thereto.

      Section 9. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable.  Notwithstanding  the foregoing  sentence,  the  Corporation  may
acquire shares of the Series A Preferred Stock in any other manner  permitted by
law,  this  Certificate  of  Designations   and  the  Restated   Certificate  of
Incorporation of the Corporation.

      Section 10.  Ranking.  All shares of the Series A Preferred Stock shall be
of equal rank in respect of the  preference as to dividends and to payments upon
the liquidation, dissolution or winding up of the Corporation with all shares of
the Preferred Stock without nominal or par value, all shares of all other series
of the Preferred Stock with par value,  the 5% Cumulative  Preferred  Stock, the
$4.50  Dividend  Cumulative  Preferred  Stock,  the  $4.30  Dividend  Cumulative
Preferred Stock and the $5.50 Dividend Cumulative Convertible Preferred Stock.

      Section 11.  Amendment.  The Restated  Certificate of Incorporation of the
Corporation  shall not be amended in any manner  which would alter or change the
powers,  preferences or special rights of the Series A Preferred  Stock so as to
affect them adversely  without the affirmative vote of the holders of two-thirds
or more of the outstanding  shares of Series A Preferred Stock,  voting together
as a single class.




<PAGE>
























                                    EXHIBIT 3.2




<PAGE>










                                     BY-LAWS


                                        of


                               BENEFICIAL CORPORATION

                              (A Delaware Corporation)











                       As Amended Through February 17, 1998




<PAGE>


                                      BY-LAWS


                                        of


                                BENEFICIAL CORPORATION

                               (A Delaware Corporation)



                                      ARTICLE I.

                                Meetings of Stockholders

         SECTION 1. Annual  Meetings.  The annual meeting of the stockholders of
the  Corporation  for the election of directors and for the  transaction of such
other  business  as properly  may come before the meeting  shall be held on such
date,  and at  such  time  and  place,  as may be  designated  by the  Board  of
Directors.

         SECTION 2. Special  Meetings.  Special meetings of the holders of stock
of the  Corporation  entitled  to vote,  or of any class of such stock or series
thereof,  may be called at any time by the Chairman of the Board of Directors or
the  President  or the Board of  Directors.  Special  meetings of the holders of
stock of the Corporation entitled to vote shall be called by the Chairman of the
Board of Directors or the President or the Secretary,  upon the written  request
of the holders of shares of such stock  having (a)  majority of the voting power
entitled  to vote  thereon  when  the  only  action  to be  taken  requires  the
affirmative  vote of a plurality  or a majority of the votes cast or entitled to
be cast,  or (b) 80% of the voting power  entitled to vote thereon if any action
proposed to be taken requires the affirmative  vote of at least 80% of the votes
cast or  entitled  to be cast.  Any such  written  request  shall state a proper
purpose or purposes of the meeting and shall be delivered to the Chairman of the
Board of Directors or the President or the Secretary.

         Special  meetings  of the  holders  of any  class of  stock  or  series
thereof,  for the removal of directors  elected by such class and the filling of
any  vacancy  thereby  created,  pursuant  to Article IV of the  Certificate  of
Incorporation  shall be called by the  Chairman of the Board of Directors or the
President or the Secretary upon the written  request of the holders of one-fifth
or more of the outstanding shares of any such class of stock of the Corporation.

         SECTION 3. Place of Meetings. All meetings of the stockholders shall be
held at such  places,  within  or  without  the State of  Delaware,  as shall be
specified in the respective notices or waivers of notice thereof.

         SECTION 4. Notice of Meetings. Except as otherwise required by statute,
the Secretary or an Assistant  Secretary  shall cause notice of the time,  place
and purpose or purposes of each meeting of the  stockholders  (whether annual or
special) to be mailed,  at least ten (but not more than sixty) days prior to the
meeting, to each stockholder


<PAGE>


of record entitled to vote at his post office address as the same appears on the
books of the Corporation at the time of such mailing.

         SECTION  5.  Quorum.  At any  meeting  of the  holders  of any class or
classes or series thereof of the capital stock of the Corporation,  the presence
of a quorum shall be determined  with respect to each such class or series which
is  entitled  to vote on any matter  before the  meeting as a separate  class or
series,  and shall also be  determined  for any  combination  of any  classes or
series  which are  entitled to vote on any matter  before the meeting on a joint
vote of such  combined  classes  or  series.  Except as  otherwise  provided  by
statute, the presence, in person or by proxy, of the holders of record of shares
then  issued  and  outstanding  of such class or series or  combination  thereof
having a majority  of the votes which might be cast on any matter to be voted on
by such class or series or combination thereof shall be necessary and sufficient
to constitute a quorum for the  transaction  of business by such class or series
or combination thereof.  Notwithstanding the absence of a quorum of any class or
series or  combination  thereof  at any  meeting,  any other  class or series or
combination  thereof for which a quorum is present may  transact all business to
come  before it. In the  absence  of a quorum,  a majority  in  interest  of the
holders,  present in person or by proxy,  of any class or series or  combination
thereof for which a quorum is not  present  (such  majority  in  interest  being
determined in  accordance  with the number of votes  attributable  to the shares
held by such holders),  or if no such holders are present in person or by proxy,
any officer entitled to preside or act as secretary of such meeting, may adjourn
the  meeting  from  time to time  until a  quorum  of such  class or  series  or
combination thereof shall be present.

         SECTION  6.  Voting.  In the event  directors  are to be elected by the
holders of any class of stock or series  thereof  pursuant  to Article IV of the
Certificate of Incorporation,  said directors shall be elected by a plurality of
the  votes  of each of said  classes  of  stock or  series  thereof  cast at the
election.  All  directors to be elected by the holders of stock  having  general
voting  power shall be elected by a plurality  of the votes cast at the election
by such stockholders.  At all meetings of the stockholders,  all matters,  other
than the  election  of  directors  and those the  manner  of  deciding  which is
expressly  regulated by statute or by the Certificate of  Incorporation or these
By-Laws,  shall be  decided  by a  majority  of the  total  votes of the  shares
entitled  to vote  whose  holders  are  present  in person or by proxy.  At each
meeting of the stockholders each stockholder  entitled to vote shall be entitled
to vote in  person  or by proxy;  provided,  however,  that the right to vote by
proxy  shall  exist only in case the  instrument  authorizing  such proxy to act
shall have been  executed  in  writing  (which  shall  include  telegraphing  or
cabling) by the stockholder himself or by his attorney thereunto duly authorized
in writing.

         SECTION 7.  Judges of  Election.  The Board of  Directors  may  appoint
judges of election to serve at any election of directors and at balloting on any
other matter that may properly come before a meeting of stockholders.






                                                   -2-


<PAGE>


If no such appointment shall be made, or if any of the judges so appointed shall
fail to attend,  or refuse or be unable to serve,  then such  appointment may be
made by the presiding officer at the meeting.

         SECTION 8.  Notice of  Nominations.  Nominations  for the  election  of
directors may be made by the Board of Directors or by any  stockholder  entitled
to vote for the election of  directors.  A notice of the intent of a stockholder
to make any such  nomination  shall be made in writing,  delivered  or mailed by
first class  United  States  mail,  postage  prepaid,  to the  Secretary  of the
Corporation  not less than 90 days in advance of the annual  meeting  or, in the
event of a special meeting of stockholders  for the election of directors,  such
notice  shall be delivered or mailed to the  Secretary  of the  Corporation  not
later than the close of the seventh day following the day on which notice of the
meeting is first mailed to stockholders.

         Every such notice by a stockholder shall set forth:

                  (a) the name and residence of the  stockholder  of the
Corporation  who intends to make the nomination;

                  (b) a  representation  that the  stockholder  is a  holder  of
         record  of the  Corporation's  voting  stock and  intends  to appear in
         person or by proxy at the  meeting  to  nominate  the person or persons
         specified in the notice;

                  (c) a description of all arrangements or understandings  among
         the  stockholders  and each  nominee  and any other  person or  persons
         (naming  such person or persons)  pursuant to which the  nomination  or
         nominations are to be made by the stockholder;

                  (d) such other information  regarding each nominee proposed by
         such  stockholder as would have been required to be included in a proxy
         statement  filed  pursuant  to the proxy  rules of the  Securities  and
         Exchange Commission had each nominee been nominated,  or intended to be
         nominated, by the Board of Directors of the Corporation; and

                  (e) the  consent of each  nominee to serve as  director of the
Corporation if so elected.

         Any  nomination  not made in accordance  with the  foregoing  procedure
shall be disregarded.

         Nothing in this Article I shall be construed  to affect  adversely  the
rights  of  Preferred   Shareholders  where  such  rights  are  granted  by  the
Certificate of Incorporation.

         SECTION 9. Notice of  Business.  No business  may be  transacted  at an
annual meeting of stockholders, other than business that is either (a) specified
in the  notice  of  meeting  (or  any  supplement  thereto)  given  by or at the
direction of the Board of Directors (or any duly authorized  committee thereof),
(b) otherwise  properly brought before the annual meeting by or at the direction
of the Board of Directors (or any duly authorized committee thereof)

                                                   -3-


<PAGE>


or (c) otherwise  properly  brought before the annual meeting by any stockholder
of the  Corporation (i) who is a stockholder of record on the date of the giving
of the notice  provided for in this Article I, Section 9, and on the record date
for the  determination  of stockholders  entitled to vote at such annual meeting
and (ii) who complies  with the notice  procedures  set forth in this Article I,
Section 9.

         In addition to any other  applicable  requirements,  for business to be
properly  brought before an annual meeting by a  stockholder,  such  stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.

         To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal  executive offices of the Corporation
not less  than  sixty  (60)  days nor more than  ninety  (90) days  prior to the
anniversary  date of the immediately  preceding  annual meeting of stockholders;
provided,  however,  that in the event that the  annual  meeting is called for a
date that is not within thirty (30) days before or after such anniversary  date,
notice by the  stockholder  in order to be timely must be so received  not later
than the close of business on the tenth (10th) day  following  the date on which
such  notice  of the  date of the  annual  meeting  was  mailed  or such  public
disclosure of the date of the annual meeting was made, whichever first occurs.

         To be in proper written form, a  stockholder's  notice to the Secretary
must set forth as to each matter such  stockholder  proposes to bring before the
annual  meeting (i) a brief  description  of the business  desired to be brought
before the annual  meeting and the reasons for  conducting  such business at the
annual meeting, (ii) the name and record address of such stockholder,  (iii) the
class or series and number of shares of capital stock of the  Corporation  which
are owned  beneficially or of record by such stockholder,  (iv) a description of
all arrangements or understandings between such stockholder and any other person
or persons  (including  their  names) in  connection  with the  proposal of such
business by such  stockholder and any material  interest of such  stockholder in
such business and (v) a representation  that such stockholder  intends to appear
in person or by proxy at the  annual  meeting to bring such business  before the
meeting.

         No business  shall be conducted at the annual  meeting of  stockholders
except  business  brought  before the  annual  meeting  in  accordance  with the
procedures set forth in this Article I, Section 9, provided, however, that, once
business has been properly  brought before the annual meeting in accordance with
such  procedures,  nothing  in this  Article  I,  Section  9, shall be deemed to
preclude discussion by any stockholder of any such business.  If the Chairman of
an annual meeting  determines that business was not properly  brought before the
annual meeting in accordance with the foregoing  procedures,  the Chairman shall
declare to the meeting that the business  was not  properly  brought  before the
meeting and such business shall not be transacted.







                                                   -4-


<PAGE>


                                  ARTICLE II.

                               Board of Directors

         SECTION 1. Number.  The number of directors which shall  constitute the
whole Board of Directors  shall be fixed from time to time by a resolution  of a
majority of the Board of Directors  but such number shall not be less than three
nor more than 20. The number of  directors  constituting  the Board  shall be 20
until otherwise fixed by a majority of the whole Board.

         SECTION 2. Election and Term of Office.  Directors  shall be elected at
the annual meeting of the  stockholders.  Each director,  whether  elected at an
annual meeting or to fill a vacancy or otherwise, shall continue in office until
his  successor  shall  have been  elected,  or until his death,  resignation  or
removal in the manner hereinafter provided, or, in the case of directors elected
by a class vote of the  holders of any class of stock  pursuant to Article IV of
the Certificate of  Incorporation,  until such time as any "Class Voting Period"
specified  in  such  Article  IV  of  the  Certificate  of  Incorporation  shall
terminate.  No person who has attained the age of 75 years shall be eligible for
election as a director of the  Corporation  but any such person may  continue to
serve for the unexpired term for which he was elected;  provided,  however, that
the Board of Directors upon a resolution  adopted by a majority of the directors
may waive the age eligibility requirement with respect to any specific member of
the Board of Directors.

         SECTION 3. Annual and Regular Meetings;  Notice.  The annual meeting of
the Board of Directors  shall be held on the first  business  day,  other than a
Saturday,  of June in each year at the office of the Corporation in the State of
Delaware  or at such  other  time and  place  (within  or  outside  the State of
Delaware) as the Chairman or President may direct,  and at such hour as shall be
specified in the respective  notice or waiver of notice  thereof,  subsequent to
the  Annual  Meeting of  Stockholders,  but not later than June 15 in each year.
Regular  meetings of the Board of Directors  shall be held on the first business
day, other than a Saturday, of March, September and December in each year at the
office of the  Corporation  in the State of  Delaware  or at such other time and
place (within or outside the State of Delaware) as the Chairman or President may
direct,  and at such hour as shall be  specified  in the  respective  notices or
waivers of notice  thereof.  Notice of each annual and regular  meeting shall be
mailed to each  director  addressed  to him at his  residence  or usual place of
business at least two days before the day on which the meeting is to be held, or
shall be sent to him at such place by telegram, radio or cable or shall be given
to him  orally or by  telephone,  not later than the day before the day on which
the  meeting is to be held.  Such  notice need not state the purpose or purposes
for which the meeting is called, unless otherwise required by statute. Notice of
any annual or regular meeting need not be given to any director who shall attend
such meeting in person,  or to any  director  who shall waive notice  thereof in
writing or by telegram, radio or cable, whether before or after the time of such
meeting. No notice of any adjourned meeting need be given.






                                                   -5-


<PAGE>


         SECTION 4. Special Meetings;  Notice.  Special meetings of the Board of
Directors  shall  be held  whenever  called  by the  Chairman  of the  Board  of
Directors,  the  President or one-third of the  directors at such time and place
(within  or  outside  of the  State  of  Delaware)  as may be  specified  in the
respective  notices or waivers of notice thereof Notice of each special  meeting
shall be mailed to each  director  addressed  to him at his  residence  or usual
place of business at least two days before the day on which the meeting is to be
held, or shall be sent to him at such place by telegram, radio or cable or shall
be given to him  personally or by  telephone,  not later than the day before the
day on which the  meeting is to be held.  Such notice need not state the purpose
or  purposes  for which the  meeting is called,  unless  otherwise  required  by
statute.  Notice of any special  meeting  need not be given to any  director who
shall attend such  meeting in person,  or to any director who shall waive notice
thereof in writing or by telegram,  radio or cable,  whether before or after the
time of such meeting. No notice of any adjourned meeting need be given.

         SECTION 5. Quorum and Manner of Acting. At all meetings of the Board of
Directors   the   presence  of  one-third  of  the  total  number  of  directors
constituting the whole Board, but in no event less than two directors,  shall be
necessary and sufficient to constitute a quorum for the transaction of business,
subject,  however,  to the  provisions  of Sections 7 and 8 of this  Article II.
Except as  otherwise  required  by  statute,  by Sections 1 and 6 of Article III
hereof  and by Section 5 of  Article  IV  hereof,  the act of a majority  of the
directors  present at any meeting at which a quorum is present  shall be the act
of the Board of  Directors.  In the  absence  of a  quorum,  a  majority  of the
directors present may adjourn the meeting from time to time until a quorum shall
be present.

         SECTION 6. Resignations.  Any director may resign at any time by giving
written notice of such  resignation to the Board of Directors,  the President or
the Secretary of the  Corporation.  Unless  otherwise  specified in such written
notice,  such resignation shall take effect upon receipt thereof by the Board of
Directors or any such officer.

         SECTION  7.  Removal  of  Directors.  At  any  special  meeting  of the
stockholders,  duly  called  as  provided  in these  By-Laws,  any  director  or
directors may, by the affirmative  vote of the holders of outstanding  shares of
stock of the  Corporation  entitled  to vote  thereon  having 80% or more of the
voting  power be  removed  from  office  either  with or  without  cause and his
successor  or their  successors  may be elected at such meeting or a majority of
the  remaining  directors  may, to the extent  vacancies  are not filled by such
election,  fill any  vacancy or  vacancies  created by such  removal;  provided,
however,  that any  director  who shall have been elected by a class vote of the
holders  of any class of stock  pursuant  to Article  IV of the  Certificate  of
Incorporation  may be removed,  and any such vacancy  created  thereby  shall be
filled, only in the manner specified in such Article IV.

         SECTION 8.  Vacancies and  Additional  Directorships.  If any vacancy
shall occur in the Board of Directors by reason of death, resignation  or
removal,  or as the result of the increase in the number of directorships or




                                                   -6-


<PAGE>


the  termination  of any "Class  Voting  Period"  specified in Article IV of the
Certificate of  Incorporation,  the remaining  directors  shall continue to act.
Such  vacancies  may be filled  (subject to the  provisions of Section 7 of this
Article II) by a majority of the remaining directors, though less than a quorum;
provided,  however,  that a  vacancy  caused by the  death or  resignation  of a
director  who  shall  have been  elected  by the  holders  of any class of stock
pursuant to Article IV of the Certificate of Incorporation  shall be filled only
in the manner specified in such Article IV.

         SECTION  9.  Compensation.  Directors  shall  receive  such  reasonable
compensation  for their  services as such,  whether in the form of a salary or a
fixed fee for  attendance at meetings,  with  expenses,  if any, as the Board of
Directors may from time to time  determine.  Nothing herein  contained  shall be
construed  to preclude any director  from serving the  Corporation  in any other
capacity and receiving compensation therefor.

                               ARTICLE III.

                          Committees of the Board

         SECTION 1.  Designation,  Power,  Alternate Members and Term of Office.
The Board of  Directors  may,  by  resolution  passed by a majority of the whole
Board, designate one or more committees (including an Executive Committee), each
committee  to consist of two or more of the  directors of the  Corporation.  Any
such committee,  to the extent provided in such  resolution,  shall have and may
exercise the power of the Board of Directors in the  management  of the business
and affairs of the Corporation, and may authorize the seal of the Corporation to
be affixed to all papers  which may require it. The Board may  designate  one or
more  directors  as  alternate  members  of any  committee,  who,  in the  order
specified  by the Board may  replace  any absent or  disqualified  member at any
meeting of the  committee.  If at a meeting of any  committee one or more of the
members  thereof  should be absent or  disqualified,  and if either the Board of
Directors has not so designated any alternate  member or members,  or the number
of absent or disqualified  members  exceeds the number of alternate  members who
are  present at such  meeting,  then the  member or  members  of such  committee
(including  alternates) present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum,  may unanimously  appoint another
director to act at the  meeting in the place of any such absent or  disqualified
member.  The term of office of the members of each  committee  shall be as fixed
from time to time by the Board of Directors, subject to these By-Laws; provided,
however,  that any  committee  member  who ceases to be a member of the Board of
Directors shall ipso facto cease to be a committee member.  Each committee shall
appoint  a  secretary,  who  may be the  Secretary  of  the  Corporation  or any
Assistant Secretary thereof.

         SECTION 2.  Meetings,  Notices and Records.  Each committee may provide
for the holding of regular  meetings,  with or without  notice,  and may fix the
time and place at which such  meeting  shall be held.  Special  meetings of each
committee  shall be held upon call by or at the direction of its chairman or, if
there be no chairman,




                                                   -7-


<PAGE>


by or at  the  direction  of any  two of its  members,  at the  time  and  place
specified in the respective notices or waivers of notice thereof. Notice of each
special meeting of a committee shall be mailed to each member of such committee,
addressed to him at his residence or usual place of business,  at least two days
before the day on which the meeting is to be held, or shall be sent by telegram,
radio or cable,  addressed to him at such place,  or  telephoned or delivered to
him personally, not later than the day before the day on which the meeting is to
be held.  Notice of any meeting of a  committee  need not be given to any member
thereof who shall attend the meeting in person or who shall waive notice thereof
by telegram,  radio, cable or other writing, whether before or after the time of
such meeting.  Notice of any adjourned meeting need not be given. Each committee
shall keep a record of its proceedings.

         SECTION  3.  Quorum  and  Manner  of  Acting.  At each  meeting  of any
committee  the  presence of a majority of its  members  then in office  shall be
necessary and sufficient to constitute a quorum for the transaction of business,
and the act of a  majority  of the  members  present  at any  meeting at which a
quorum  is  present  shall be the act of such  committee;  in the  absence  of a
quorum,  a majority of the members  present at the time and place of any meeting
may  adjourn  the  meeting  from time to time until a quorum  shall be  present.
Subject to the  foregoing  and other  provisions  of these By-Laws and except as
otherwise  determined by the Board of Directors,  each  committee may make rules
for the conduct of its business. Any determination made in writing and signed by
all the  members  of such  committee  shall be as  effective  as if made by such
committee at a meeting.

         SECTION 4.  Resignations.  Any member of a committee  may resign at any
time by giving written notice of such resignation to the Board of Directors, the
Chairman of the Board, the President or the Secretary of the Corporation. Unless
otherwise  specified in such  notice,  such  resignation  shall take effect upon
receipt thereof by the Board or any such officer.

         SECTION  5.  Removal.  Any  member of any  committee  may be  removed
at any time by the Board of Directors with or without cause.

         SECTION 6.  Vacancies.  If any vacancy  shall occur in any committee by
reason  of death,  resignation,  disqualification,  removal  or  otherwise,  the
remaining members of such committee,  though less than a quorum,  shall continue
to act until such vacancy is filled by the Board of Directors.

         SECTION  7.   Compensation.   Committee   members  shall  receive  such
reasonable  compensation  for their  services  as such,  whether  in the form of
salary or a fixed fee for attendance at meetings,  with expenses, if any, as the
Board of Directors may from time to time  determine.  Nothing  herein  contained
shall be construed to preclude any committee member from serving the Corporation
in any other capacity and receiving compensation therefor.







                                                   -8-


<PAGE>


                                     ARTICLE IV

                                      Officers

         SECTION 1. Number.  The officers of the Corporation shall be a Chairman
of the Board of Directors,  a First Vice-Chairman and a Second  Vice-Chairman of
the Board of Directors (if the Board of Directors so determines), a President, a
First  Vice-President  (if the Board of Directors so  determines),  an Executive
Vice-President  (if the Board of  Directors  so  determines)  and such number of
Senior Vice-Presidents and additional  Vice-Presidents as the Board of Directors
from time to time may determine,  a Secretary,  a Treasurer, a Controller and an
Auditor,  and such other  officers as may be  appointed in  accordance  with the
provisions of Section 3 of this Article IV.

         SECTION 2. Election; Term of Office. Each officer (except such officers
as may be  appointed  in  accordance  with the  provisions  of Section 3 of this
Article IV) shall be chosen by the Board of  Directors  at its annual  meetings.
Each such officer (whether chosen at an annual meeting of the Board of Directors
or to fill a vacancy or otherwise)  shall hold his office until his successor is
chosen and qualified, or until his death, or until he shall resign in the manner
provided  in  Section 4 of this  Article  IV, or shall be  removed in the manner
provided in Section 5 of this Article IV.

         SECTION 3. Subordinate  Officers;  Appointment.  The Board of Directors
from time to time may appoint such other  officers or agents,  including  one or
more Assistant Secretaries or Assistant Treasurers,  as it may deem necessary or
advisable,  to hold office for such period, have such authority and perform such
duties as the Board of Directors from time to time may  determine.  The Board of
Directors  may  delegate  to any  officer or agent the power to appoint any such
subordinate  officers  or agents  and to  prescribe  their  respective  terms of
office, authorities and duties.

         SECTION 4.  Resignations.  Any officer may resign at any time by giving
written notice of such  resignation to the Board of Directors,  the President or
the Secretary of the  Corporation.  Unless  otherwise  specified in such written
notice, such resignation shall take effect upon receipt thereof.

         SECTION 5. Removal. The officers  specifically  designated in Section 1
of this Article IV may be removed,  either for or without cause,  at any special
meeting  of the Board of  Directors  called  for the  purpose,  by the vote of a
majority of the whole Board of Directors.  The officers and agents  appointed in
accordance  with the  provisions of Section 3 of this Article IV may be removed,
either for or without  cause,  at any meeting of the Board of Directors,  by the
vote of a majority of the directors present at such meeting,  or by any superior
officer or agent upon whom such power of removal  shall have been  conferred  by
the Board of Directors.

         SECTION  6.  Vacancies.  A  vacancy  in any  office by reason of death,
resignation,  removal,  disqualification  or any other cause, shall be filled in
the manner  provided in this Article IV for regular  election or  appointment to
such office.


                                                   -9-


<PAGE>


         SECTION  7.  The  Chairman  and  the  Vice-Chairmen  of  the  Board  of
Directors.  The Chairman of the Board of Directors  shall be the chief executive
officer of the  Corporation  and shall be vested with and shall perform all such
powers  and duties as are  incident  to this  office and shall have the  general
supervisory powers over the Corporation. He shall preside at all meetings of the
stockholders,  the Board of Directors  and the  Executive  Committee at which he
shall be present  and shall be vested  with and  perform  such other  powers and
duties as may be  assigned to him by the Board of  Directors.  In the absence or
disability of the  Chairman,  the First  Vice-Chairman  shall be vested with and
shall perform all the powers and duties of the  Chairman,  and in the absence or
disability of the First Vice-Chairman,  the Second Vice-Chairman shall be vested
with and  perform all the powers and duties of the  Chairman.  In the absence or
disability of the Second  Vice-Chairman,  the President shall be vested with and
shall  perform all the powers and duties of the  Chairman  and in the absence or
disability of the President,  the First  Vice-President shall be vested with and
shall  perform  all the  powers and duties of the  Chairman.  In the  absence or
disability of the First  Vice-President,  the Executive  Vice-President shall be
vested with and shall perform all the powers and duties of the Chairman.

         SECTION 8(a). The President.  In the absence of the Chairman, the First
Vice-Chairman  and the  Second  Vice-Chairman  of the  Board of  Directors,  the
President  shall  preside at all meetings of the  stockholders  and the Board of
Directors,  shall sign or  countersign  all  certificates,  contracts  and other
instruments  of the  Corporation  as authorized  by the Board of Directors,  and
shall make reports to the Board of Directors and stockholders. The President may
sign  certificates  representing  stock of the  Corporation,  the issue of which
shall have been authorized by the Board of Directors (the signature of which may
be a facsimile signature).  The President shall be vested with and shall perform
such  other  powers  and  duties as are  incident  to the  office  and as may be
assigned to him by the Board of Directors or by the Chairman .
         SECTION 8(b).  The Office of the  President.  In lieu of the President,
the Board of Directors  may from time to time create an office of the  President
and  appoint  officers  of the  Corporation  as  members  of the  Office  of the
President.  Each member of the Office of the  President  shall be assigned  such
powers and duties and such areas of  responsibility as the Board of Directors or
the Chairman may from time to time  determine  and shall report to the Chairman.
Should the Board of  Directors  create an Office of the  President  in lieu of a
President then the term President as utilized  throughout  these By-Laws (except
in this Section 8(b) and in Section 7 and the first  sentence of Section 8(a) of
this Article IV) shall refer to the First-Vice Chairman.

         SECTION 9.  The Vice-Presidents.

                  (a) In the absence or disability of the  President,  the First
Vice-President  shall be vested with and shall perform all the powers and duties
of the  President  and shall perform such other duties as may be assigned to him
by the Board of Directors.







                                                   -10-


<PAGE>


                  (b) In the  absence or  disability  of the  President  and the
First  Vice-President,  the  Executive  Vice-President  shall be vested with and
shall perform all the powers and duties of the President.

                  (c) In the absence or disability of the  President,  the First
Vice-President,  and  the  Executive  Vice-President,  a  Senior  Vice-President
designated by the Chairman or in his absence by the First  Vice-Chairman  of the
Board of  Directors,  shall be vested with and shall  perform all the powers and
duties of the President.

                              (d)  In  the   absence   or   disability   of  the
President,   the  First Vice-President,  the Executive Vice-President and the
Senior Vice-Presidents, a Vice-President designated  by the Chairman  or in  his
absence  by the  First Vice-Chairman  of the Board of Directors  shall be vested
with and shall perform all the powers and duties of the President.

Any Vice-President may sign certificates  representing stock of the Corporation,
the issuance of which shall have been  authorized by the Board of Directors (the
signature to which may be a facsimile  signature),  and shall be vested with and
shall  perform  such other  powers and duties as may be  assigned  to him by the
Board of Directors.

         Section 10.  The Secretary.  The Secretary shall

                  (a)  record  all  the  proceedings  of  the  meetings  of  the
stockholders,  Board  of  Directors,  Executive  Committee  and  other  standing
committees in a book to be kept for that purpose;

                  (b) cause all notice to be duly given in  accordance  with the
provisions of these By-Laws and as required by statute;

                  (c) whenever any Committee  shall be appointed in pursuance of
a resolution of the Board of Directors,  furnish the Chairman of such  Committee
with a copy of such resolution;

                  (d) be  custodian  of the  records  and  of  the  seal  of the
Corporation,  and cause such seal to be affixed to all certificates representing
stock of the  Corporation  prior to the issuance  thereof and to all instruments
the  execution of which on behalf of the  Corporation  under its seal shall have
been duly authorized in accordance with these By-Laws;

                  (e)  see  that  the   lists,   books,   reports,   statements,
certificates  and other  documents and records  required by statute are properly
prepared, kept and filed;

                  (f) have  charge of the  stock  books of the  Corporation  and
cause the stock and  transfer  books to be kept in such manner as to show at any
time  the  amount  of  stock  of  the  Corporation  of  each  class  issued  and
outstanding,  the manner in which and the time when such stock was paid for, the
names  alphabetically  arranged  and the  addresses  of the  holders  of  record
thereof,  the number of shares  held by each and the time when each  became such
holder of record;  and exhibit at all  reasonable  times to any  director,  upon
application, the original or duplicate stock register;

                                                   -11-


<PAGE>


                  (g) sign (unless the Treasurer,  an Assistant  Treasurer or an
Assistant   Secretary  shall  sign)  certificates   representing  stock  of  the
Corporation  the  issuance of which shall have been  authorized  by the Board of
Directors (the signature to which may be a facsimile signature); and

                  (h) in general,  perform all duties  incident to the office of
Secretary  and such other duties as are given to him by these By-Laws or as from
time to time may be assigned to him by the Board of Directors or the President.

         SECTION 11.  The Treasurer.  The Treasurer shall

                  (a) have charge of and supervision over and be responsible for
the funds, securities, receipts and disbursements of the Corporation;

                  (b)  cause  the  moneys  and  other  valuable  effects  of the
Corporation to be deposited in the name and to the credit of the  Corporation in
such banks or trust  companies  or with such  bankers or other  depositaries  as
shall be selected by him;

                  (c) cause  the funds of the  Corporation  to be  disbursed  by
checks or drafts upon the authorized depositaries of the Corporation,  and cause
to be taken and preserved proper vouchers for all moneys disbursed;

                  (d) render to the proper officers or the Board of Directors or
any  standing  committee  whenever  requested,  a  statement  of  the  financial
condition of the  Corporation  and of all his  transactions  as  Treasurer,  and
render a full  financial  report at the annual meeting of the  stockholders,  if
called upon to do so;

                  (e) cause to be kept at the principal  business  office of the
Corporation correct books of account of all its business and transactions;

                  (f) sign (unless the Secretary,  an Assistant  Secretary or an
Assistant   Treasurer  shall  sign)  certificates   representing  stock  of  the
Corporation  the  issuance of which shall have been  authorized  by the Board of
Directors (the signature to which may be a facsimile signature);

                  (g) be  empowered,  from  time  to time to  require  from  the
officers  or  agents  of the  Corporation  reports  or  statements  giving  such
information as he may desire with respect to any and all financial  transactions
of the Corporation; and

                  (h) in general,  perform all duties  incident to the office of
Treasurer  and such other duties as are given to him by these By-Laws or as from
time to time may be assigned to him by the Board of Directors or the President.

         SECTION  12.  Assistant  Secretaries.  At the  request  of the
Secretary  or in his  absence  or disability,  the  Assistant  Secretary
designated  by him (or in the  absence  of such  designation,  the Assistant
Secretary designated by


                                                   -12-


<PAGE>


the Board of Directors  or the  President)  shall  perform all the duties of the
Secretary, and when so acting shall have all the powers of and be subject to all
restrictions  upon the Secretary.  The Assistant  Secretaries shall perform such
other  duties as from time to time may be assigned to them  respectively  by the
Board of Directors, the President or the Secretary.

         SECTION 13. Assistant Treasurers. At the request of the Treasurer or in
his absence or disability,  the Assistant Treasurer designated by him (or in the
absence of such designation,  the Assistant Treasurer designated by the Board of
Directors or the President)  shall perform all the duties of the Treasurer,  and
when so acting  shall have all the powers of and be subject to all  restrictions
upon the Treasurer.  The Assistant Treasurers shall perform such other duties as
from  time  to time  may be  assigned  to  them  respectively  by the  Board  of
Directors, the President or the Treasurer.

         SECTION 14. The  Controller.  The Controller  shall  supervise the
keeping of the accounts of the Corporation and shall perform such other duties
as may be assigned to him by the Board of Directors.

         SECTION 15. The  Auditor.  The  Auditor  shall  supervise the  auditing
of the  accounts of the Corporation and shall perform such other duties as may
be assigned to him by the Board of Directors.

         SECTION 16.  Salaries.  The salaries of the officers of the Corporation
shall be fixed  from time to time by the  Board of  Directors  or any  committee
thereof  which  may be  authorized  by the  Board.  The Board of  Directors  may
delegate to any person the power to fix the  salaries or other  compensation  of
any officers or agents  appointed in accordance with the provisions of Section 3
of this Article IV. No officer shall be prevented  from receiving such salary by
reason of the fact that he is also a director of the Corporation.

         SECTION  17.  Surety  Bonds.  In case the Board of  Directors  shall so
require,  any  officer  or  agent  of  the  Corporation  shall  execute  to  the
Corporation  a bond in such sum and with such surety or sureties as the Board of
Directors may direct, conditioned upon the faithful performance of his duties to
the Corporation,  including responsibility for negligence and for the accounting
for all property, funds or securities of the Corporation which may come into his
hands.

                               ARTICLE V.

                Execution of Instruments, Borrowing of Money
                        and Deposit of Corporate Funds

         SECTION  1.   Execution  of   Instruments.   The   President   and  any
Vice-President,  subject to the  approval of the Board of  Directors,  may enter
into any  contract  or execute and  deliver  any  instrument  in the name and on
behalf of the  Corporation.  The Board of Directors may authorize any officer or
officers,  or agent or agents, to enter into any contract or execute and deliver
any  instrument  in  the  name  and  on  behalf  of the  Corporation,  and  such
authorization may be general or confined to specific instances.

                                                   -13-


<PAGE>


         SECTION 2. Loans.  No loans or advances shall be obtained or contracted
for, by or on behalf of the Corporation and no negotiable  paper shall be issued
in its name,  unless and except as authorized  by the Board of  Directors.  Such
authorization  may be general or confined to special  instances.  Any officer or
agent of the  Corporation  thereunto so authorized may effect loans and advances
for the  Corporation,  and for such loans and  advances  may make,  execute  and
deliver  promissory  notes,  bonds or other  evidences  of  indebtedness  of the
Corporation. Any officer or agent of the Corporation thereunto so authorized may
pledge,  hypothecate  or  transfer  as  security  for the payment of any and all
loans,  advances,  indebtedness and liabilities of the Corporation,  any and all
stocks,  bonds, other securities and other personal property at any time held by
the Corporation, and to that end may endorse, assign and deliver the same and do
every act and thing necessary or proper in connection therewith.

         SECTION  3.  Notes;  Checks;  Other  Instruments.  All  notes,  drafts,
acceptances,  checks,  endorsements,  and all evidences of  indebtedness  of the
Corporation  whatsoever,  shall be signed by such  officer or  officers  or such
agent or agents of the  Corporation and in such manner as the Board of Directors
from time to time may determine.  Endorsements  for deposit to the credit of the
Corporation  in any of its duly  authorized  depositaries  shall be made in such
manner as the Board of Directors from time to time may determine.

         SECTION 4. Proxies.  Proxies to vote with respect to shares of stock of
other  corporations  owned by or standing in the name of the  Corporation may be
executed and  delivered  from time to time on behalf of the  Corporation  by the
President or a Vice-President and the Secretary or an Assistant Secretary of the
Corporation or by any other person or persons thereunto  authorized by the Board
of Directors.

                               ARTICLE VI.

                               Record Dates

         SECTION 1. Record Dates.  For the purpose of any corporate  action,  in
order that the Corporation may determine the stockholders (1) entitled to notice
of or to vote at any meeting of  stockholders or any  adjournment  thereof;  (2)
with respect only to holders of Preferred Stock,  entitled to express consent to
corporate action in writing without a meeting of holders of Preferred Stock; (3)
entitled to receive payment of any dividend or any  distribution or allotment of
any rights;  or (4)  entitled  to exercise  any rights in respect to any change,
conversion  or exchange of stock,  the Board of  Directors  may fix in advance a
record date which shall be not more than sixty nor less than ten days before the
date of such meeting,  nor more than sixty days prior to any other action.  Only
those  stockholders  of record on the dates so fixed shall be entitled to any of
the  foregoing  rights,  notwithstanding  the  transfer of any such stock on the
books of the  Corporation  after  any such  record  date  fixed by the  Board of
Directors.






                                                   -14-


<PAGE>


                                 ARTICLE VII.

                                Corporate Seal

         The corporate seal shall be circular in form and shall bear the name of
the Corporation and words and figures denoting its  organization  under the Laws
of the State of Delaware  and the year  thereof and  otherwise  shall be in such
form as shall be approved from time to time by the Board of Directors.

                                  ARTICLE VIII.

                                  Fiscal Year

         The  fiscal  year of the  Corporation  shall  begin on the first day of
January  in each  year and shall end on the  thirty-first  day of the  following
December.

                                    ARTICLE IX.

                Indemnification of Directors, Officers and Employees

         The Corporation  shall indemnify,  in the manner and to the full extent
permitted by law, any person (or the estate of any person) who was or is a party
to, or is threatened to be made a party to any threatened,  pending or completed
action,  suit  or  proceeding,  whether  or  not  by  or in  the  right  of  the
Corporation,  and whether  civil,  criminal,  administrative,  investigative  or
otherwise, by reason of the fact that such person is or was a director,  officer
or  employee  of the  Corporation,  or is or was  serving at the  request of the
Corporation  as  a  director,   officer  or  employee  of  another  corporation,
partnership,  joint venture, trust or other enterprise.  The Corporation may, to
the full extent permitted by law,  purchase and maintain  insurance on behalf of
any such person against any liability which may be asserted  against him. To the
full extent permitted by law, the indemnification  provided herein shall include
expenses  (including  attorneys'  fees),  judgments,  fines and amounts  paid in
settlement,  and, in the manner provided by law, any such expenses shall be paid
by the Corporation in advance of the final  disposition of such action,  suit or
proceeding. The indemnification provided herein shall not be deemed to limit the
right of the  Corporation to indemnify any other person for any such expenses to
the full extent  permitted by law, nor shall it be deemed exclusive of any other
rights to which any person seeking  indemnification  from the Corporation may be
entitled under any agreement, vote of stockholders or disinterested directors or
otherwise,  both as to  action  in his  official  capacity  and as to  action in
another capacity while holding such office.

                                ARTICLE X.

                                Amendments

         All  By-Laws  of the  Corporation  shall be subject  to  alteration  or
repeal,  and new By-Laws may be made,  either (1) by the affirmative vote of the
holders of outstanding shares of stock of the Corporation entitled to vote

                                                   -15-


<PAGE>


thereon  having 80% or more of the voting  power  given at any annual or special
meeting,  or (2) by the  affirmative  vote of at least a  majority  of the whole
Board of Directors given at any regular or special meeting.





         I,        , DO HEREBY CERTIFY that I am of Beneficial Corporation,  a
Delaware corporation,  and that the  foregoing is a true and complete copy of
the By-Laws of said Corporation in force at the date hereof.

         IN WITNESS WHEREOF,  I have hereunto subscribed my name and affixed the
seal of said Corporation this        day of          , 19  .




































                                                   -16-


<PAGE>























                             EXHIBIT 10.12




<PAGE>



                          BENEFICIAL CORPORATION

                     1990 NON-QUALIFIED STOCK OPTION PLAN


         1.  Purpose of Plan.  The purpose of the  Beneficial  Corporation  1990
Non-Qualified  Stock  Option  Plan  ("Plan")  is to attract  and retain able and
experienced  key management  employees and directors and to provide an incentive
to those persons to improve operations and increase profits by affording them an
opportunity   to   acquire   stock    ownership   in   Beneficial    Corporation
("Corporation").  The options  granted under the Plan are not intended to comply
with Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").

         2.  Administration  of Plan.  This Plan  shall be  administered  by the
Compensation   Committee   ("Committee")  of  the  Board  of  Directors  of  the
Corporation  ("Board") which shall consist of not less than three members of the
Board,  none of whom shall be eligible to participate  in this Plan,  other than
pursuant  to  Section  8  hereof,  for a period  of at least  one year  prior to
appointment.  The  determinations  of the Committee  shall be made in accordance
with  their  judgments  as to the  best  interests  of the  Corporation  and its
stockholders  and in  accordance  with the  purposes of the Plan.  A majority of
members of the Committee shall constitute a quorum,  and all  determinations  of
the Committee shall be made by a majority of its members.  Any  determination of
the  Committee  under  the Plan may be made  without  notice or  meeting  of the
Committee if in writing signed by all of the Committee members. No member of the
Committee  or the Board  shall be liable for any action  taken or  determination
made in good faith with respect to this Plan or any option granted hereunder.

         The  Committee   shall  have  full  authority  and  discretion  to  (a)
determine,  consistent  with the  provisions  of this Plan,  the employees to be
granted  options,  the times at which  options  shall be granted,  the number of
shares  subject to each  option,  the period  during  which each option  becomes
exercisable  (subject  to Section 7  hereof),  and the terms  contained  in each
option  agreement,  and (b) adopt rules and regulations and prescribe or approve
any forms or documents to carry out the  purposes and  provisions  of this Plan.
Notwithstanding the foregoing,  the number of shares subject to option which may
be granted to any employee, regardless of position or title, during any calendar
year under this Plan may not exceed 200,000, provided that such limitation shall
be subject to  adjustment  consistent  with the  provisions of Section 12 hereof
with  respect to any change in the Common Stock of the  Corporation  which shall
occur  on or  after  November  21,  1996.  The  Committee's  interpretation  and
construction  of any  provisions  of this  Plan or  determination  of any  grant
hereunder  shall be  binding  and  conclusive,  except as such may be  otherwise
modified, amended or changed by the Board. The authority of the Board under this
Section shall not be exercised in any manner which could  jeopardize  the status
of the Committee as disinterested administrator of the Plan.

         3. Eligibility.  The class of employees eligible to participate in this
Plan  shall  consist  of  those  headquarters  employees  holding  the  title of
Assistant  Vice  President  or above,  or the  equivalent  of that  position  in
function and responsibility in the case of subsidiaries of the Corporation,  and
those  employees  in the  Corporation's  field  operations  holding the title of
Director and above. An employee who has been granted an option may be granted an
additional  option  or  options  under  this  Plan  if the  Committee  shall  so
determine.  The  granting  of an option  under  this Plan  shall not  affect any
outstanding stock option previously  granted to an optionee under this Plan. The
term  "subsidiary"  shall mean any domestic or foreign  corporation of which the
Corporation owns, directly or indirectly, in excess of 50% of the total combined
voting power of all classes of stock of such corporation.

         Notwithstanding  any  language  of this  Section  to the  contrary,  no
individual  shall be  eligible  to  receive  an  option  as an  employee  of the
Corporation  or any of its  subsidiaries  for a period of one year after  having
been eligible to receive options pursuant to Section 8 hereof.

         Those  eligible  shall  include  individuals  who  are  subject  to the
personal  income tax laws of foreign  countries,  including  Canada,  the United
Kingdom, and the German Federal Republic, and employed by the Corporation or any
of its subsidiaries,  and the Committee shall have the discretion, but shall not
be  required,  to  include  as a part  of the  terms  of each  option  agreement
provisions and conditions  consistent with the Plan, intended to comply with the
applicable requirements of the internal revenue laws of such foreign countries.

         4. Shares Subject to Plan. Subject to adjustment as provided in Section
12,  the  aggregate  number of shares  which  shall be  authorized  to be issued
pursuant to options  granted by the  Committee  under this Plan for any calendar
year  shall not  exceed  that  number of shares  equal to one and  three-quarter
percent  (.0175)  of the  total  issued  and  outstanding  Common  Stock  of the
Corporation, par value $1.00 per share, as measured on the first day of any such
calendar year,  which may be treasury  shares  reacquired by the  Corporation or
authorized  and unissued  shares or a  combination  of both.  If during any such
calendar year options for less than the total number of shares so authorized are
granted  under the Plan,  the balance of such shares shall be available  for the
granting of options during any succeeding  year. Any shares subject to an option
under this Plan which  shall  expire or be  terminated  for any reason  shall be
available for the granting of options in that, or any succeeding year during the
term of this Plan.

         5. Option Price.  The option price per share under each option  granted
by the Committee  shall be not less than 100% of the fair market value per share
on the date an  option  is  granted,  but in no event  less  than the par  value
thereof.  The fair market  value  shall be the  average  between the highest and
lowest quoted selling price per share on the New York Stock  Exchange  Composite
Transactions Tape ("Composite  Tape") on the date the option is granted (subject
to adjustment under Section 12 hereof). If there should be no sale of the shares
reported  on such date,  then the option  price per share  shall be the  average
between the highest and lowest quoted  selling  price per share  reported on the
Composite Tape on the next preceding day on which there shall have been a sale.

         6.       Exercise of Option.

                  (a) Each Option granted under the Plan shall be exercisable on
the dates and for the number of shares as shall be  provided  in a stock  option
agreement between the Corporation and optionee  evidencing the option granted by
the Committee and the terms thereof. Shares shall be issued to the optionee upon
payment in full either in cash or by an  exchange  of shares of Common  Stock of
the Corporation  previously  owned by the optionee for at least six months prior
to the date of  exercise,  or a  combination  of both,  in an amount or having a
combined  value equal to the aggregate  purchase price for the shares subject to
the option or portion thereof being exercised. The value of the previously owned
shares of Common  Stock  exchanged  in full or  partial  payment  for the shares
purchased  upon the exercise of an option shall be equal to the  aggregate  fair
market  value,  as  defined  in  Section  5, of such  shares  on the date of the
exercise of such options.

                  (b) The  Corporation  shall be entitled to withhold the amount
of any tax attributable to any amounts payable or shares  deliverable  under the
Plan after giving the person entitled to receive the payment or delivery (or the
person  liable  for  the  tax,  if  different)  notice  as  far  in  advance  as
practicable,  and the  Corporation  may defer making  payment or delivery of any
benefits  under  the  Plan  if  any  tax is  payable  until  indemnified  to its
satisfaction. The Committee may, in its discretion and subject to rules which it
may adopt,  permit an optionee  to pay all or a portion of all taxes  arising in
connection  with  the  exercise  of an  option  by  electing  to  (i)  have  the
Corporation  withhold  shares of Common  Stock,  or (ii) deliver other shares of
Common Stock  previously  owned by the optionee for at least six months having a
fair  market  value (as defined in Section 5) equal to the amount to be withheld
provided,  however,  that  the  amount  to be  withheld  shall  not  exceed  the
optionee's estimated total Federal,  State and local tax obligations  associated
with the transaction. The fair market value of fractional shares remaining after
payment of the withholding taxes shall be paid to the optionee in cash.

         7.  Term of  Option.  Options  granted  under  the  Plan  shall  become
exercisable at such  intervals or dates and over such period of time  ("Exercise
Period") and for such number of shares which may be purchased at any one time as
shall be  determined by the Committee  (collectively  "Option  Terms") to be set
forth in the  stock  option  agreements  between  individual  optionees  and the
Corporation  under the Plan  ("Option  Agreements"),  but in no event  shall the
Exercise  Period  commence  prior to one year after the date of grant (except as
permitted in Sections 11(c) and 10(e) hereof) or extend more than 10 years after
the date of grant.  The  Committee  may,  consistent  with  Section  13  hereof,
authorize  existing  Option  Agreements  to be amended to provide for  different
Option  Terms,   in  whole  or  in  part,   including  an  amendment  to  permit
transferability  in  accordance  with  Section 9 hereof.  Options  which are not
exercised prior to the end of the Exercise  Period shall expire,  and the shares
subject to such options shall become available for the granting of other options
under the Plan during that or any succeeding year.

         8.       Grants to Outside Directors.

                  (a) On the 15th  day of the  month of  November  of each  year
prior to the  termination of this Plan, each member of the Board of Directors of
the Corporation  (excluding  Emeritus  Directors) who is not then an employee of
the  Corporation  or  any  of  its  subsidiaries   ("Outside   Director")  shall
automatically  be issued an option pursuant to this Plan to purchase 4000 shares
of the Common Stock of the Corporation,  provided,  however, that such number of
shares shall be  automatically  proportionately  adjusted upon the occurrence of
any event  described  in  Section  12 hereof,  in a manner  consistent  with any
adjustment  affected  pursuant to that  Section.  In the event that  November 15
shall in any year fall on a day on which the New York Stock Exchange is not open
for trading,  options  shall  instead be issued  pursuant to this Section on the
next preceding trading day.

                  (b) Such options  shall be granted at an option price equal to
the fair market  value per share (as defined at Section 5) on the date of grant,
shall be  exercisable at any time after one year following the date of grant and
prior to ten years  following  the date of grant,  and shall be  subject  to the
restrictions on transferability provided in Section 9 hereof.

                  (c) If for any reason  during the term of an  unexercised  and
unexpired option issued pursuant to this Section, the optionee shall cease to be
a voting member of the Board of Directors of the Corporation,  the option may be
exercised at any time during its normal exercise period,  provided however, that
any option not  exercisable on the date of such  cessation  shall expire on such
date.

                  (d)      Options issued pursuant to this Section shall be
subject to adjustment  pursuant to Section 12 hereof.

                  (e)  Notwithstanding  any  provisions  of this  Section to the
contrary,  no Outside  Director of the Corporation  shall be eligible to receive
any  option  pursuant  to the Plan for a period of one year  after  having  been
eligible  to  receive  options  pursuant  to  the  Plan  as an  employee  of the
Corporation or any of its subsidiaries.

                  (f) The  provisions  of this  Section 8 may be  amended by the
Board from time to time,  affecting  the issuance  date,  number of shares under
option, and terms of options issued to Outside Directors hereunder.

                  (g)  On  December  1,  1997,  each  Outside  Director  of  the
Corporation  shall be issued an option  pursuant to the Plan to  purchase  2,000
shares of the Common Stock of the Corporation.  This non-recurring  option grant
shall be on the terms, and subject to the restrictions, set forth in subsections
(b), (c), (d) and (e) of this Section 8.



<PAGE>


         9.       Transferability of Options.

                  Options   or  LSAR's   granted   under   this  Plan  shall  be
transferable  by the  optionee by will or the laws of descent and  distribution,
and shall also be  transferable  by the  optionee to (i) the  spouse,  siblings,
parents and lineal  descendants of the optionee  ("Immediate  Family  Members"),
(ii)  organizations  described at Section  501(c)(3) of the Code  ("Charities"),
(iii) a trust or trusts  for the  exclusive  benefit  of such  Immediate  Family
Members  or  Charities,  or (iv) a  partnership  or  partnerships  in which such
Immediate  Family Members are the only partners,  provided that (A) there may be
no consideration for any such transfer,  (B) the stock option agreement pursuant
to which  options  were  granted  under  this Plan must  expressly  provide  for
transferability  in a manner  consistent  with this  Section  9, (C)  subsequent
transfers of  transferred  options shall be prohibited  except those pursuant to
will or the laws of descent and  distribution,  and (D) any such  transfer  must
expressly provide that the optionee is designated as agent of the transferee for
purposes of notices from the Plan or the Committee  with respect to the options,
and for purposes of any notices to the Plan or the Committee from the transferee
with respect to the options,  including  but not limited to notices of intent to
exercise.  Following transfer,  any such options shall continue to be subject to
the same terms and conditions as were applicable  immediately prior to transfer,
provided that for purposes of Sections 6 and 13 hereof the term "optionee" shall
be deemed to refer to the transferee. The events of termination of employment of
Section 10 hereof  shall  continue to be applied  with  respect to the  original
optionee,  following  which the options shall be  exercisable  by the transferee
only to the extent,  and for the periods  specified  at Sections  10(b),  10(c),
10(d) and 10(e).  Absent a transfer in  accordance  with the  provisions of this
Section 9, options or LSAR's granted under the Plan shall be exercisable  during
the optionee's lifetime only by the optionee (or the legal representative of the
optionee under Section 10(c)).

         10.      Termination of Employment and Death of Optionee.

                  (a) If during the term of an  unexercised  option the optionee
terminates  employment with the Corporation or any of its  subsidiaries  for any
reason  (other than those  specified  at (b) through  (e) of this  Section)  the
option  shall  expire  and  cease  to  be  exercisable   immediately  upon  such
termination.

                  (b) If during  the term of an  unexercised  option  employment
with the  Corporation or any of its  subsidiaries is terminated by reason of the
death of such  optionee,  the option may be  exercised  within a two year period
following the date of death to the extent that such option is exercisable at the
date of death,  but in no event later than the Exercise Period  specified in the
Option  Agreement  by  which  such  option  was  granted.  The  option  shall be
exercisable  during  such period by the  optionee's  estate or by any person who
acquires the right to exercise the option by reason of the optionee's death.

                  (c) If during  the term of an  unexercised  option  employment
with the  Corporation or any of its  subsidiaries is terminated by reason of the
"long term disability" of the optionee,  as such term is defined for purposes of
the Long Term Disability Benefits Plan maintained by the Corporation, the option
may be exercised,  to the extent that it was exercisable at termination,  at any
time during the Exercise Period  specified in the Option Agreement by which such
option was granted. The optionee's legal representative,  if appointed, shall be
entitled to exercise the option.

                  (d) If during  the term of an  unexercised  option  employment
with the  Corporation  or any of its  subsidiaries  is  terminated  by reason of
retirement  at any time  following  the date the  optionee is eligible to retire
early  pursuant to Section 4 of the  Beneficial  Corporation  Pension Plan dated
October 1, 1983, as amended  ("Pension Plan") the option may be exercised at any
time during the three month period  following his or her Early  Retirement  Date
(as defined in the Pension Plan),  to the extent that such option is exercisable
on such Early  Retirement  Date, but in no event later than the Exercise  Period
specified in the Option Agreement by which such option was granted.

                  (e) If during  the term of an  unexercised  option  employment
with the  Corporation  or any of its  subsidiaries  is  terminated  by reason of
retirement  at any time  following  the date the  optionee is eligible to retire
early,  as defined  at 10(d)  above,  and after the date on which such  optionee
attains the age of sixty two years,  the option shall be exercisable at any time
during the  Exercise  Period  specified  in the Option  Agreement  by which such
option was granted.  Notwithstanding  the provisions of Section 7 hereof and the
terms of each Option Agreement, all options held at retirement, then unexercised
and unexpired, by any optionee whose employment is terminated as provided for in
this Section 10(e) shall become immediately  exercisable upon the later to occur
of (i) the optionee's retirement date, or (ii) the expiration of a period of six
months following the date of grant of any affected option.

                  (f) The portion of any option subject to this Section 10 which
is not  exercisable  at the  beginning  of,  or  exercised  within  the  periods
permitted  by  paragraphs  (b)  through (e) above  shall  lapse,  and the shares
subject to such option shall become  available for the granting of other options
under this Plan during that or any succeeding year.

         11.      Change of Control.

                  (a) Qualifying  Event.  The occurrence of a "Change in Control
of the  Corporation",  as that  term  is  defined  herein,  shall  constitute  a
"Qualifying  Event"  for  purposes  of the Plan.  A "Change  in  Control  of the
Corporation"  shall mean a change in control of a nature  that would be required
to be reported in  response to Item 5(f) of Schedule  14A (or the  corresponding
provision of any future  schedule of required proxy  statement  information)  of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the  "Exchange  Act"),  whether or not the  Corporation is then subject to such
reporting  requirement;  provided,  that, without  limitation,  such a change in
control shall be deemed to have occurred if:

                           (i)      the Corporation shall cease to be a publicly
owned  corporation  having at least 1000 stockholders; or

                           (ii)     any "person" (as defined in Sections  13(d)
and 14(d) of the Exchange Act) is or  becomes  the  "beneficial  owner" (as
defined  in Rule  13d-3  under the Exchange  Act),  directly  or  indirectly,
of  securities  of  the  Corporation representing  fifteen  percent (15%) or
more of the combined voting power of the Corporation's then outstanding
securities; or

                           (iii)    during any period of two (2)  consecutive
years (not including any period prior to the  adoption  of this Plan)  there
shall cease to be a majority of the Board  comprised  as follows:  individuals
who at the  beginning of such period constitute  the Board and any new
director(s)  whose  election  by the Board or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors  then still in office who either were  directors at the
beginning of the period or whose  election or nomination for election was
previously so approved.

                  (b) Limited Stock Appreciation  Rights. Upon the occurrence of
a Qualifying Event,  there shall  automatically be issued in connection with all
options granted pursuant to the Plan, then unexercised and unexpired, to persons
at such time subject to restrictions on purchase and sale of the Common Stock of
the  Corporation  under  Section  16(b)  of  the  Exchange  Act,  Limited  Stock
Appreciation  Rights  ("LSAR"),  as  hereinafter  defined.  The number of shares
subject  to each  LSAR  shall be the same as that for the  underlying  option to
which such LSAR  relates.  For purposes of the Plan an LSAR shall  represent the
privilege to receive from the  Corporation  (without  payment to the Corporation
except for  applicable  withholding  taxes) upon exercise of such LSAR a payment
solely in cash equal to the "Option  Spread".  The "Option  Spread" shall be (i)
the  difference  between the highest  fair market value per share (as defined in
Section 5) during the 90-day period beginning on the day of the Qualifying Event
and the per share option price of the related  option,  times (ii) the number of
shares  subject to the LSAR. An LSAR shall be exercisable in whole or in part at
any time during the 30 day period  following the  expiration of six months after
the date of the Qualifying  Event,  upon notice to the Corporation in the manner
prescribed by the Committee.  Notwithstanding  Section 10(a) hereof,  options or
LSAR's granted hereunder shall remain  exercisable  during such six month and 30
day periods,  if within the Exercise  Period.  Upon the exercise of an LSAR, the
related option granted pursuant to the Plan shall cease to be exercisable to the
extent  of the  shares  of  Common  Stock  with  respect  to which  such LSAR is
exercised.  Upon the exercise or termination of a related option,  the LSAR with
respect to such related  option  shall  terminate to the extent of the shares of
Common  Stock  with  respect  to which  the  related  option  was  exercised  or
terminated.

                  (c) Acceleration of Vesting. Notwithstanding the provisions of
Section  7  hereof  and the  terms  of each  stock  option  agreement,  upon the
occurrence of any  Qualifying  Event all options  granted  under the Plan,  then
unexercised and unexpired, shall be immediately exercisable.

         12.  Adjustment  Provisions.  In the event of any  change in the Common
Stock of the  Corporation,  $1.00 par  value,  by reason of any stock  dividend,
recapitalization,  reorganization,  merger, consolidation, split-up, combination
or  exchange  of  shares,  extraordinary  dividend,  or of  any  similar  change
affecting  such  Common  Stock,  then in any such  event the  number and kind of
shares subject to options granted  pursuant to the Plan and their purchase price
per share shall be  appropriately  adjusted  consistent with such change in such
manner as the  Committee of the Plan may deem  equitable to prevent  substantial
dilution or enlargement of the rights granted  pursuant to any option  agreement
issued  hereunder.  Any  adjustments so made shall be final and binding upon all
parties.

         13. Duration,  Amendment and  Termination.  This Plan is intended to be
perpetual and shall have no stated  termination date. The Board of Directors may
amend the Plan from time to time or terminate the Plan at any time.  However, no
action or  amendment  authorized  by this  Section or Section 7 shall reduce the
amount of any  existing  benefits  or change  the terms and  conditions  thereof
without the optionee's consent.

         To the extent then required by Rule  16(b)(3),  as  promulgated  by the
Securities  and  Exchange  Commission,  approval  of  the  stockholders  of  the
Corporation  shall be  required  for any  amendment  to the Plan which shall (a)
materially  increase  the total  number of shares  which may be issued under the
Plan; (b) materially reduce the minimum purchase price of shares of Common Stock
which may be made subject to options  under the Plan, or (c)  materially  modify
the requirements as to eligibility for options under the Plan.

         By mutual agreement  between the Corporation and an optionee  hereunder
or under any other stock option plan of the  Corporation,  options or rights may
be granted to the optionee in substitution and exchange for, and in cancellation
of, any benefits previously granted to the optionee under this Plan or any other
stock option plan of the Corporation.

         14. Compliance With Law. This Plan, all options issued  hereunder,  and
the  obligation of the  Corporation  to sell and deliver  shares of Common Stock
hereunder,  shall be subject to all applicable Federal and State laws, rules and
regulations and to such approvals by any  governmental  or regulatory  agency as
may be required.
         15. No Rights as Stockholder.  Individuals  granted options pursuant to
the Plan and transferees  shall have no rights as  stockholders  with respect to
any shares of Common Stock subject to such options prior to the date of issuance
to them of  certificates  for such  shares.  Other than  pursuant  to Section 12
hereof no  adjustment  shall be made for  dividends  or  distributions  or other
rights  with  respect to such  shares for which the record  date is prior to the
date on which they shall become the holder of record thereof.

         16.  Stockholder  Approval.  The  Plan  was  adopted  by the  Board  of
Directors on November 15, 1990,  subject to stockholder  approval.  The Plan was
approved by the stockholders of the Corporation on May 22, 1991.



<PAGE>
























                              EXHIBIT 12



<PAGE>


                                     Exhibit 12
<TABLE>
<CAPTION>

               BENEFICIAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
                          RATIO OF EARNINGS TO FIXED CHARGES
                             (Continuing Operations Only)

                                        Years Ended December 31
                       ---------------------------------------------------------
                        1997        1996         1995          1994         1993
                        ----        ----         ----          ----         ----
                                             (in millions)

Income From Continuing
<S>                <C>          <C>          <C>             <C>          <C>
  Operations...... $   253.7    $   281.0    $   150.5       $177.7       $186.0
   Add Provision
     for Income Taxes. 119.6        177.5        119.9        148.4        129.2
                    --------     --------     --------      -------      -------
      Earnings Before
         Income Taxes. 373.3        458.5        270.4        326.1        315.2
Fixed charges:
   Interest and Debt
     Expense.......... 855.0        812.8        816.2        673.6        633.2
   Interest Factor
     Portion of Rentals.26.5         23.3         22.3         16.3         15.8
                    --------     --------     --------      -------      -------
      Total Fixed
       Charges.....    881.5        836.1        838.5        689.9        649.0
                    --------     --------     --------      -------      -------

Earnings Before Income Taxes
   and Fixed
    Charges........ $1,254.8     $1,294.6     $1,108.9     $1,016.0       $964.2
                    ========     ========     ========     ========       ======

Ratio of Earnings to
  Fixed Charges....     1.42         1.55         1.32         1.47         1.49
                    ========     ========     ========     ========       ======

Preferred Dividend
  Requirements..... $    7.6     $    8.5     $    9.3     $    9.5       $  8.8
                    ---------   ---------     --------     --------       ------

Ratio of Earnings to Fixed Charges
   and Preferred
    Dividend
     Requirements..     1.41         1.53         1.31         1.45         1.47
                    ========     ========     ========     ========     ========

</TABLE>
         In computing the ratio of earnings to fixed charges,  earnings  consist
of net  income to which has been added  income  taxes and fixed  charges.  Fixed
charges consist  principally of interest on all indebtedness and that portion of
rentals  considered  to  represent an  appropriate  interest  factor.  Preferred
dividend requirements are grossed up to their pretax equivalent.


<PAGE>
























                                  EXHIBIT 21


<PAGE>


           LIST OF BENEFICIAL CORPORATION SUBSIDIARIES                 01/01/98
                 COMPRISING THE FINANCE DIVISION

           Name of Subsidiary                                      State
                and                                                  of
           Principal Place of Business                           Incorporation

Bencharge Credit Service Holding Company                              DE
    301 North Walnut St., Wilmington, DE 19801

        Bencharge Credit Service of America, Inc.                     DE
           301 North Walnut St., Wilmington, DE 19801
        Beneficial Credit Services Inc.                               DE
           301 North Walnut St., Wilmington, DE 19801
        Beneficial Credit Services of Connecticut Inc.                DE
           926 Main St., East Hartford, CT 06108
        Beneficial Credit Services of Mississippi Inc.                DE
           286 Highway 51, Ste. B, Ridgeland, MS 39157
        Beneficial Credit Services of South Carolina Inc.             DE
           1660 Sam Ritterburg Blvd., Charleston, SC 29407

Beneficial Arizona Inc.                                               DE
    7315 North Oracle Road, Ste. 107, Tucson, AZ  85704
Beneficial California Inc.                                            DE
    1731 W. Colorado Blvd., Los Angeles, CA  90041
Beneficial Colorado Inc.                                              DE
    3200 South Wadsworth Blvd., Lakewood, CO  80227
Beneficial Connecticut Inc.                                           DE
    926 Main St., East Hartford, CT  06108
Beneficial Delaware Inc.                                              DE
    514 Jefferic Blvd., Unit 1, Dover, DE 19901
Beneficial Florida Inc.                                               DE
    2777 University Blvd., W., Ste. 65
    Jacksonville, FL 32216
        Beneficial Mortgage Co. of Florida                            DE
           2777 University Blvd., W., Ste. 65
           Jacksonville, FL 32216

Beneficial Georgia Inc.                                               DE
    700 North Main St., Ste. 10, Alpharetta, GA 30201
Beneficial Hawaii Inc.                                                DE
    James Campbell Bldg., 826 Ft. Street Mall,
    Honolulu, HI  96813
Beneficial Idaho Inc.                                                 DE
    1003 Vista Ave., Boise, ID  83709

                                                   -1-


<PAGE>


           Name of Subsidiary                                         State
                and                                                    of
           Principal Place of Business                             Incorporation

Beneficial Illinois Inc.                                               DE
    4012 West 79th St., Chicago, IL  60652
Beneficial Indiana Inc.                                                DE
    812 S. Scatterfield Rd., Anderson, IN  46012
Beneficial Iowa Inc.                                                   IA
    301 North Walnut St., Wilmington, DE 19801
Beneficial Kansas Inc.                                                 KS
    Capitol Hills Shops, 400 SW 29th St., Ste. L,
    Topeka, KS 66611
Beneficial Kentucky Inc.                                               DE
    8512 Preston Hwy., Louisville, KY  40219
Beneficial Louisiana Inc.                                              DE
    11439 Florida Blvd., Baton Rouge, LA  70815
Beneficial Maine Inc.                                                  DE
    1041 Breighton Avenue, Portland, ME 04102
Beneficial Maryland Inc.                                               DE
    79 Forest Dr., Annapolis, MD  21401
Beneficial Massachusetts Inc.                                          DE
    Gr. Fl., 236 Cabot St., Beverly, MA  01915
Beneficial Michigan Inc.                                               DE
    12900 Hall Road., Ste. 190, Sterling Hts., MI 48313
Beneficial Minnesota Inc.                                              DE
    5180 Central Ave., NE Columbia Heights, MN 55421
Beneficial Mississippi Inc.                                            DE
    286 Highway 51, Ste. B, Ridgeland, MS 39157
Beneficial Missouri, Inc.                                              DE
    2219 C Missouri Blvd., Jefferson City, MO  65109
Beneficial Montana Inc.                                                DE
    1520 3rd St., NW, Ste. A,
    Great Falls, MT 59404
Beneficial Nebraska Inc.                                               NE
    5005 O Street, Lincoln, NE  68510
Beneficial Nevada Inc.                                                 DE
    1055 South Wells, Ste. 115, Reno, NV  89502
Beneficial New Hampshire Inc.                                          DE
    45 S. Main St., Concord, NH  03301
Beneficial New Jersey Inc.                                             DE
    146 South Street, Morristown, NJ  07960
Beneficial New Mexico Inc.                                             DE
    7200 Montgomery Blvd, NE, Ste. B 3-4,
    Albuquerque, NM 87109
                                                   -2-


<PAGE>


           Name of Subsidiary                                         State
                and                                                     of
           Principal Place of Business                             Incorporation

Beneficial North Carolina Inc.                                          DE
    6300 - 170 Creedmoor Road
    Raleigh, NC  27612
Beneficial Oklahoma Inc.                                                DE
    6935 South Lewis, Tulsa, OK  74136
Beneficial Oregon Inc.                                                  DE
    3671 SW Hall St., Beaverton, OR  97005
Beneficial Rhode Island Inc.                                            DE
    457 Main St., East Greenwich, RI  02818
Beneficial South Carolina Inc.                                          DE
    1660 Sam Ritterburg Blvd., Charleston, SC  29407
Beneficial South Dakota Inc.                                            DE
    3640 S. Highway 79, Ste. D, Rapid City, SD 57701
Beneficial Tennessee Inc.                                               TN
    3802 B Nolensville Rd., Nashville, TN 37211
Beneficial Texas Inc.                                                   TX
    6406 N. 1 H-35, Lincoln Village Shopping Center
    Austin, TX 78752
Beneficial Utah Inc.                                                    DE
    1741 West 7800 South, West Jordan, UT  84088
Beneficial Virginia Inc.                                                DE
    10809 Hull Street Road, Midlothian, VA  23112
Beneficial Washington Inc.                                              DE
    2111 N. Northgate Way, Seattle, WA  98133
Beneficial West Virginia, Inc.                                          WV
    100 Lee Street West, Charleston, WV 25302
Beneficial Wisconsin Inc.                                               DE
    11102 West National Ave., West Allis, WI 53227
Beneficial Wyoming Inc.                                                 WY
    2320 Dell Range Blvd., Ste. 300
    Cheyenne, WY 82009

Beneficial Commercial Holding Corporation                               DE
        301 North Walnut St., Wilmington, DE 19801

           Beneficial Commercial Corporation                            DE
                200 Beneficial Center, Peapack, NJ 07977
                *same as above, Lee J. Grenci

                           Beneficial Finance Leasing Corporation       DE
                                200 Beneficial Center, Peapack, NJ 07977
                                *same as above, Lee J. Grenci

                                                   -3-


<PAGE>


           Name of Subsidiary                                         State
                and                                                     of
           Principal Place of Business                             Incorporation

                           Beneficial Leasing Group, Inc.              DE
                                200 Beneficial Center, Peapack, NJ 07977
                                *same as above, Lee J. Grenci
                                Neil Corporation                       DE
                                   200 Beneficial Center, Peapack, NJ 07977
                                   *same as above, Lee J. Grenci
                                Silliman Corporation                   DE
                                   200 Beneficial Center, Peapack, NJ 07977
                                   *same as above, Lee J. Grenci

Beneficial Consumer Discount Company                                   PA
    3368 Paxton St., Scottsdale Plaza
    Harrisburg, PA  17111
Beneficial Discount Co. of Virginia                                    DE
    10809 Hull Street Road, Midlothian, VA 23113
Beneficial Finance Co. of West Virginia                                DE
    100 Lee Street West, Charleston, WV 25302
Beneficial Finance Services, Inc.                                      KS
    8771 W. 95th St., Overland Park, KS  66204
Beneficial Income Tax Service Holding Co., Inc.                        DE
    301 North Walnut St., Wilmington, DE 19801

    Beneficial Tax Masters Inc.                                        DE
        301 North Walnut St., Wilmington, DE 19801

Beneficial Industrial Loan Company of Kentucky                         DE
    8512 Preston Hwy., Louisville, KY 40219

Beneficial Investment Co.                                              DE
    301 North Walnut St., Wilmington, DE 19801

        B B Credit Corp.                                               DE
           301 North Walnut St., Wilmington, DE 19801
        Beneficial Credit Services of New York, Inc.                   DE
           622 Yonkers Ave., Yonkers, NY  10704  (Inactive)
        Beneficial New York Inc.                                       NY
           622 Yonkers Ave., Yonkers, NY 10704
        Beneficial Homeowner Service Corporation                       DE
           622 Yonkers Ave., Yonkers, NY  10704

Beneficial Homeowners Inc. (Inactive)                                  DE
    301 North Walnut St., Wilmington, DE 19801

                                                   -4-


<PAGE>



           Name of Subsidiary                                         State
                and                                                     of
           Principal Place of Business                            Incorporation

Beneficial Loan & Thrift Co.                                            MN
    5180 Central Ave., NE.
    Columbia Heights, MN  55421

Beneficial Mortgage Holding Company                                     DE
    301 North Walnut St., Wimington, DE  19801

    Beneficial Excess Servicing Inc.                                    DE
        301 North Walnut St., Wilmington, DE 19801
        *same as above, Elizabeth A. Dawson
    Beneficial Home Mortgage Loan Corp.                                 DE
        457 Main St., East Greenwich, RI  02818
    Beneficial Mortgage Co. of Arizona                                  DE
        7315 North Oracle Road, Ste. 107, Tucson, AZ  85704
    Beneficial Mortgage Co. of Colorado                                 DE
        3200 South Wadsworth Blvd., Lakewood, CO  80227
    Beneficial Mortgage Co. of Connecticut                              DE
        926 Main St., East Hartford, CT  06108
    Beneficial Mortgage Co. of Georgia                                  DE
        700 North Main Street, Ste. 10
        Alpharetta, GA 30201
    Beneficial Mortgage Co. of Idaho                                    DE
        1003 Vista Ave., Boise, ID  83709
    Beneficial Mortgage Co. of Indiana                                  DE
        812 S. Scatterfield Rd., Anderson, IN  46012
    Beneficial Mortgage Co. of Kansas, Inc.                             DE
        Capitol Hills Shops, 400 SW 29th St., Ste. L,
        Topeka, KS 66611
    Beneficial Mortgage Co. of Louisiana                                DE
        11439 Florida Blvd., Baton Rouge, LA  70815
    Beneficial Mortgage Co. of Maryland                                 DE
        79 Forest Dr., Annapolis, MD  21401
    Beneficial Mortgage Co. of Massachusetts                            DE
        Gr. Fl., 236 Cabot St., Beverly, MA  01915
    Beneficial Mortgage Co. of Mississippi                              DE
        286 Highway 51, Ste. B, Ridgeland, MS 39157
    Beneficial Mortgage Co. of Missouri, Inc.                           DE
        2219 C Missouri Blvd., Jefferson City, MO  65109
    Beneficial Mortgage Co. of Nevada                                   DE
        1055 South Wells, Ste. 115, Reno, NV  89502
                                                   -5-

<PAGE>


           Name of Subsidiary                                         State
                and                                                     of
           Principal Place of Business                            Incorporation

    Beneficial Mortgage Co. of New Hampshire                            DE
        45 S. Main St., Concord, NH  03301
    Beneficial Mortgage Co. of North Carolina                           DE
        6300 - 170 Creedmoor Road
        Raleigh, NC  27612
    Beneficial Mortgage Co. of Oklahoma                                 DE
        6935 South Lewis, Tulsa, OK  74136
    Beneficial Mortgage Co. of Rhode Island                             DE
        457 Main St., East Greenwich, RI  02818
    Beneficial Mortgage Co. of South Carolina                           DE
        1660 Sam Ritterburg Blvd., Charleston, SC  29407
    Beneficial Mortgage Co. of Texas                                    DE
        6406 N. 1 H-35, Lincoln Village Shopping Center
        Austin, TX 78752
    Beneficial Mortgage Co. of Utah                                     DE
        1741 West 7800 South, West Jordan, UT  84088
    Beneficial Mortgage Co. of Virginia                                 DE
        10809 Hull Street Road, Midlothian, VA  23112

Beneficial Savings Bank, FSB                                           A
    430 Knights Run Ave., Tampa, FL 33602                            Federal
    *same as above, Andrea J. Kaplan                               Savings Bank

        Beneficial Retail Services Inc.                                 DE
           430 Knights Run Ave., Tampa, FL 33602

        Beneficial Service Corporation                                  DE
           430 Knights Run Ave., Tampa, FL 33602

Benevest Group Inc.                                                     DE
    301 N. Walnut Street, Wilmington, DE  19801

    Benevest Services, Inc.                                             WA
        2111 N. Northgate Way, Seattle, WA  98133

Alabama Properties, Inc.                                                DE
    200 Beneficial Center, Peapack, NJ  07977
    *same as above, Matthew J. Broas, Esq.
    Owns real estate in the District of Columbia
    and State of Colorado

                                                    -6-


<PAGE>


           Name of Subsidiary                                        State
                and                                                    of
           Principal Place of Business                             Incorporation

BMC Holding Company                                                    DE
    301 North Walnut St., Wilmington, DE 19801
    *same as above, Janice L. Lewis

    Beneficial Mortgage Corporation                                    DE
        301 North Walnut St., Wilmington, DE  19801
        *same as above, Janice L. Lewis

           Beneficial Mortgage Services, Inc.                          DE
                301 North Walnut St., Wilmington, DE 19801
                *Charles D. Brown, Esq., 200 Beneficial Center
                Peapack, NJ 07977
                A  limited/special  purpose  Corporation  to comply  with rating
                Agencies rules regarding Securitizations.

Beneficial Credit Corp.                                                DE
    301 North Walnut St., Wilmington, DE 19801
    *same as above, Janice L. Lewis

Beneficial Finance Limited                                             UK
    Beneficial House, Easthampstead Road,
    Bracknell, Berkshire, RG12 1NS
    *same as above, Anthony Lee

Beneficial Insurance Group Holding Company                             DE
    301 North Walnut St., Wilmington, DE 19801
    *same as above, Elizabeth A. Dawson

    BFC Agency, Inc.                                                   DE
        400 Beneficial Center, Peapack, NJ  07977
        *same as above, Leonard Fisher
        Acts as an insurance agency

    BFC Insurance Agency of America                                    WY
        400 Beneficial Center, Peapack, NJ 07977
        *same as above, Leonard Fisher
        Acts as an insurance agency



                                                   -7-


<PAGE>


           Name of Subsidiary                                        State
                and                                                   of
           Principal Place of Business                            Incorporation

        Beneficial Bank Public Limited Company                         UK
           Beneficial House, Easthampstead Road
           Bracknell, Berkshire, RG12 1NS
           *same as above, Anthony Lee
           Operates in the banking field in the
           United Kingdom

                Beneficial Financial Services Limited                  UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS *same as above, Anthony Lee
                   Performs services for Beneficial Bank Public Limited Company

                Beneficial Financing Limited                           UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS
                   *same as above, Anthony Lee
                   Performs services for Beneficial Bank Public
                   Limited Company

                Endeavour Personal Financial Limited                   UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS
                   *same as above, Anthony Lee
                   Provides real estate secured loans

                Beneficial Leasing Limited                             UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS
                   *same as above, Anthony Lee
                   Performs services for Beneficial Bank Public
                   Limited Company

                Beneficial Trust (Guernsey) Limited                    UK
                   *Rysaffe International Services Ltd.
                   La Tonnelle House, Les Banques, St. Sampson,
                   Guernsey, Channel Islands
                   Performs services for Beneficial Bank Public
                   Limited Company



                                                   -8-


<PAGE>


           Name of Subsidiary                                          State
                and                                                      of
           Principal Place of Business                            Incorporation

                Beneficial Trust Investments Limited                   UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS
                   * same as above, Anthony Lee
                   Performs services for Beneficial Bank Public
                   Limited Company

                Beneficial Trust (Jersey) Limited                      UK
                   *Rysaffe International Services Ltd.
                   La Tonnelle House, Les Banques, St. Sampson,
                   Guernsey, Channel Islands
                   Performs services for Beneficial Bank Public
                   Limited Company

                Beneficial Trust Nominees Limited                      UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS
                   *same as above, Anthony Lee
                   Performs services for Beneficial Bank Public
                   Limited Company

                The Loan Corporation Limited                           UK
                   Abbey Gardens, 6 Abbey Street, Reading,
                   Berkshire RG1 3BA, England
                   *Anthony Lee, Beneficial House,
                   Easthampstead Road., Bracknell,
                   Berkshire, RG 12 1NS, England
                   Performs a Loan Broker Service for Sterling
                   Bank & Trust Limited

                Security Trust Limited                                 UK
                   Beneficial House, Easthampstead Road
                   Bracknell, Berkshire, RG12 1NS
                   *same as above, Anthony Lee
                   Performs services for Beneficial Bank Public
                   Limited Company




                                                   -9-


<PAGE>


           Name of Subsidiary                                           State
                and                                                      of
           Principal Place of Business                            Incorporation

                Sterling Credit Limited                                UK
                   Abbey Gardens, 6 Abbey Street,
                   Reading, Berkshire RG1 3BA, Eng.
                   *Anthony Lee, 6th Floor, Beneficial
                   House, Easthampstead Road, Bracknell,
                   Berkshire, RG12 1NS
                   Engages in making Second Mortgage
                   Consumer Loans.

                Sterling Credit Management Limited                     UK
                    Abbey Gardens, 4 Abbey Street, Reading,
                   Berkshire RG1 3BA,  England *Anthony Lee,  Beneficial  House,
                   Easthampstead Road, Bracknell, Berkshire, RG12 1NS Engages in
                   Managing and Collecting Loan Portfolios of Third Parties.

    Beneficial Canada Holdings Inc.                                  Canada
        8500 Leslie St., Ste. 600,
        Thornhill, Ont., Canada
        *same as above, Jean A. Bedard
        A holding company

           Beneficial Canada Inc.                                    Canada
                8500 Leslie St., Ste. 600
                Thornhill, Ont., Canada
                *same as above, Jean A. Bedard
                Engaged in the business of making
                consumer loans to individuals, purchasing
                installment sales contracts, evidencing time
                sales of merchandise on services and related
                activities in Canada

           Beneficial Realty Ltd.                                    Canada
                8500 Leslie St., Ste. 600
                Thornhill, Ont., Canada
                *same as above, Jean A Bedard
                Engaged in the business of second mortgage loans.



                                                   -10-


<PAGE>



           Name of Subsidiary                                          State
                and                                                      of
           Principal Place of Business                             Incorporation

Beneficial Direct, Inc.                                                   NJ
    400 Beneficial Center
    Peapack, NJ 07977 *same as above, Barbara L. Hill
    Direct marketing of credit
    life insurance and other related products.

BFC Ireland (Holdings) Limited                                        Ireland
    3 Burlington Road
    Dublin 4, Ireland
    *same as above, Matsack Trust Limited
    a Holding Company

           BFC Insurance (Life) Limited                               Ireland
                22-24 Lower Mount Street
                Newmount House, Dublin 2, Ireland
                *Matsack Trust  Limited,
                3 Burlington  Road,  Dublin 4, Ireland
                Will operate as a full line life,
                accident and health insurance
                company

           BFC  Insurance  Limited                                   Ireland
                22-24  Lower  Mount  Street  Newmount
                House,  Dublin 2,  Ireland
                Will  operate  as a full line  life,
                *Matsack Trust  Limited,
                3 Burlington  Road,  Dublin 4, Ireland
                Will operate as a full line life,
                accident and health insurance company

           BFC Management Services Limited                           Ireland
                3 Burlington Road, Dublin 4, Ireland
                Will  operate as a serving  company
                to  service  Life  Insurance
                written  by  a  Third   Party   carrier
                in  Ireland   for  loan
                operations/sales in Ireland *Matsack Trust Limited,





                                                                          -11-


<PAGE>


           Name of Subsidiary                                          State
                and                                                       of
           Principal Place of Business                             Incorporation

        Beneficial Bank AG                                            Germany
           Augustenstrasse 7
           7000 Stuttgart 1, Germany
           *Dr. Klaus A. Gerstenmaier, Lenzhalde 83,
           7000, Stuttgart 1, Germany
           Engaged in consumer loans in Germany

    Extracard Corp.                                                      DE
        301 North Walnut St., Wilmington, DE  19801
        *same as above, Elizabeth A. Dawson
        Engage in any lawful acts or activities
        for which  corporations  may be
        organized under the General Corporation Law of Delaware.

BFC Insurance Agency of Nevada                                           NV
    301 N. Walnut St., Wilmington,  DE 19801
    *same as above, Elizabeth A. Dawson Acts as an insurance agency

Beneficial Insurance Group, Inc.                                         DE
    400 Beneficial Center, Peapack, NJ  07977
    *same as above, Leonard Fisher
    A management company

Service Administrators, Inc. (USA)                                       CO
    205 E. 10th St., Amarillo, TX  79101
    *400 Beneficial Center, Peapack, NJ  07977
    Leonard Fisher

Service General Insurance Company                                        OH
    400 Beneficial Center, Peapack, NJ  07977
    *same as above, Leonard Fisher

    Beneficial Ohio Inc.                                                 DE
        5025 Arlington Centre Blvd., Columbus, OH 43220

    Service Management Corporation                                       OH
        400 Beneficial Center, Peapack, NJ  07977
        *same as above, Leonard Fisher

        B.I.G. Insurance Agency, Inc.                                    OH
           400 Beneficial Center, Peapack, NJ  07977
            *same as above, Leonard Fisher
                                                   -12-


<PAGE>


           Name of Subsidiary                                          State
                and                                                      of
           Principal Place of Business                            Incorporation

    The Central National Life Insurance Company of Omaha                DE
        400 Beneficial Center, Peapack, NJ  07977
        *same as above, Leonard Fisher
        Full line life, accident and health insurance company

    The Central National Life Insurance Company of Omaha                DE
        400 Beneficial Center, Peapack, NJ  07977
        *same as above, Leonard Fisher
        Full line life, accident and health insurance company

           First Central National Life Insurance Company                NY
                of New York
                400 Beneficial Center, Peapack, NJ 07977
                *same as above, Leonard Fisher

    Wesco Insurance Company                                             DE
        400 Beneficial Center, Peapack, NJ  07977
        *Elizabeth A. Dawson, 301 N. Walnut St.
        Wilmington, DE  19801
        Selling non-filing insurance in Delaware

        Southwest Texas General Agency, Inc.                            TX
           205 East 10th St., Amarillo, TX  79101
           *same as above, Leah Kelley

Beneficial Land Company, Inc.                                           NJ
    200 Beneficial Center, Peapack, NJ 07977
    *same as above, Matthew J. Broas, Esq.
    Owns real estate in the Borough of Peapack &
    Gladstone, NJ

Beneficial Management Corporation                                       DE
    200 Beneficial Center, Peapack, NJ 07977
    *same as above, Millicent A. Picker, Esq.
    Provides Management, Accounting Services and Advertising for Affiliates.

        Beneficial Management Institute, Inc.                           NY
           200 Beneficial Center, Peapack, NJ 07977
           *same as above, Millicent A. Picker, Esq.


                                                   -13-


<PAGE>


           Name of Subsidiary                                         State
                and                                                     of
           Principal Place of Business                             Incorporation

Beneficial Management Corporation of America                            DE
    301 North Walnut St., Wilmington, DE  19801
    *same as above, Janice L. Lewis
    Management companies providing supervision, audit,
    legal, training and other
    services for financial and other subsidiaries, at cost

        Beneficial Franchise Company Inc.                               DE
           301 North Walnut St., Wilmington, DE 19801
           *same as above, Elizabeth A. Dawson
           Engages in the Management and Ownership of
           Trademarks and Patents.

                Beneficial Mark Holding Inc.                            DE
                   301 North Walnut St., Wilmington, DE 19801
                    *same as above, Elizabeth A. Dawson

        Beneficial Trademark Co.                                        DE
           301 North Walnut St., Wilmington, DE 19801
           *same as above, Elizabeth A. Dawson
           An Investment Company

Beneficial Management Headquarters, Inc.                                NJ
    200 Beneficial Center, Peapack, NJ 07977
    *same as above, Matthew J. Broas, Esq.
    Owns real estate in Peapack and Gladstone Borough, NJ
    and Bedminster Township, NJ

        Beneficial Facilities Corporation                               NJ
        200 Beneficial Center, Peapack, NJ  07977
        *same as above Matthew J. Broas, Esq.
        Owns real estate in Peapack and Gladstone
        Borough, NJ

Beneficial National Bank                                            National
    1300 Market Street, Wilmington, DE 19801                      Banking Assoc.
    *same as above, Kevin T. Peck, Esq.
    A commercial bank doing business in the State of Delaware

        Beneficial Service Corporation of Delaware                      DE
           1300 Market Street, Wilmington, DE 19801
           To sell Insurance on behalf of its Parent
           Corporation

                                                   -14-


<PAGE>


           Name of Subsidiary                                           State
                and                                                      of
           Principal Place of Business                            Incorporation

Beneficial National Bank USA                                         National
    301 North Walnut St. Wilmington, DE 19801                     Banking Assoc.
    *same as above, Kevin T. Peck                                      (DE)
    A private label credit card operation

        Beneficial Service Corporation of New Jersey                    DE
           301 North Walnut St., Wilmington, DE 19801
           To sell Insurance on behalf of its Parent Corporation.

Beneficial Real Estate Company, Inc.                                    NJ
    200 Beneficial Center, Peapack, NJ  07977
    *same as above, Matthew J. Broas, Esq.
    Owns real estate in Peapack and Gladstone Borough, NJ

Beneficial Systems Development Corporation                              DE
    101 East Kennedy Blvd., Ste. 700, Tampa, FL 33602
    Will  engage  in  the  business  of  applications,
    development,   computer
    programming, consulting and other related
    services in Tampa, Florida

Beneficial Telemarketing Services Inc.                                  DE
    301 North Walnut St., Wilmington, DE 19801
    Will provide telemarketing services

Beneficial Technology Corporation                                       DE
    500 Beneficial Center, Peapack, NJ  07977
    *same as above, Peter R. Callas
    Performs data processing services for finance and
    other subsidiaries

Bon Secour Properties Inc.                                              AL
    200 Beneficial Center, Peapack, NJ 07977
    *same as above, Matthew J. Broas, Esq.
Owns real estate in Peapack and Gladstone Borough, NJ

Capital Financial Services Inc.                                         NV
    5025 Arlington Centre Blvd, Columbus, OH  43220





                                                   -15-


<PAGE>


           Name of Subsidiary                                           State
                and                                                       of
           Principal Place of Business                            Incorporation

Corporate Security Engineering Services, Inc.                           NJ
    200 Beneficial Center, Peapack, NJ 07977
    *same as above, Matthew J. Broas, Esq.
    Engaged in the business of designing security
    and life safety systems for commercial use

Garrison Platt Properties Inc.                                          FL
    200 Beneficial Center, Peapack, NJ 07977
    *same as above, Matthew J. Broas, Esq.
    Owns real estate in Tampa, FL

Harbour Island Inc.                                                     FL
    424 Knights Run Avenue
    Tampa, FL  33602
    *Matthew J. Broas, Esq., 200 Beneficial Center,
    Peapack, NJ  07977
    Oversees the development of a piece of
    real estate in Florida and all activities
    related thereto

        Harbour Island Property Management Inc.                         FL
        Harbour Island Security Co., Inc.                               FL
        H I Venture One, Inc.                                           FL
        H I Venture Three, Inc.                                         FL
        H I Venture Four, Inc.                                          FL
        Tampa Island Transit Company, Inc.                              FL
        All the above, 424 Knights Run Avenue
        Tampa, FL  33602
        *Matthew J. Broas, Esq., 200 Beneficial Center,
        Peapack, NJ  07977

Personal Mortgage Holding Company                                       DE
    301 North Walnut St., Wilmington, DE 19801

        Personal Mortgage Corporation                                   DE
           100 Business Center Dr., Hwy. 22,
           Brewster, NY 10509

Southern Trust  Company  301 North Walnut St.,                          DE
    Wilmington,  DE 19801 *same as
    above,  Elizabeth A. Dawson Acts as transfer
    agent for certain  subsidiaries
    of Beneficial Corporation
                                                   -16-


<PAGE>


           Name of Subsidiary                                          State
                and                                                     of
           Principal Place of Business                            Incorporation

Southwest Beneficial Finance, Inc.                                      IL
    301 North Walnut St., Wilmington, DE  19801

Wesco Properties, Inc.                                                  DE
    301 North Walnut St.,
    Wilmington, DE 19801
    *same as above, Carolyn Micolucci
    Holds real estate

           Beneficial Real Estate Joint Ventures, Inc.                  DE
                301 North Walnut St., Wilmington, DE 19801
                *same as above, Elizabeth A. Dawson

             * Minutes of company kept at this  address
            ** Remaining  shares are Directors'  qualifying  shares
          ***  Remaining  shares  are  owned by Beneficial Corporation

NOTE: Except where otherwise stated, minutes of the companies are kept by
         Janice L. Lewis, 301 North Walnut St., Wilmington, Delaware 19801.



















                                                   -17-



<PAGE>



                                                                    01/01/98

                                                                  State of
              INACTIVE CORPORATIONS                              Incorporation

      Beneficial Credit Services Northeast Inc.                         DE

      Beneficial Credit Services of Alabama Inc.                        DE

      Beneficial Data Systems Limited                                   UK

      Beneficial Finance Co.                                            DE

      Beneficial Finance Co. of Alaska                                  DE

      Beneficial Finance Co. of Canada                                Canada

      Beneficial Finance Co. of Columbia                                DC

      Beneficial Financial Center, Inc.                                 DE

      Beneficial Marketing Corporation                                  OH

      Beneficial North Dakota Inc.                                      DE

      Beneficial PayNet Systems, Inc.                                   DE

      Beneficial Premium Services Limited                               UK

      Beneficial Securities, Inc.                                       DE

      Beneficial Vermont Inc.                                           DE

      Benevest Escrow Company                                           DE

      Benevest Service Company                                          DE

      Capital Credit Services Inc.                                      DE

      Guaranty and Indemnity Insurance Company                          DE

      Personal Finance Company, Inc.                                    NY

      Sterling Mortgages Limited                                        UK



<PAGE>

























                                EXHIBIT 23




<PAGE>



                       INDEPENDENT AUDITORS' CONSENT


         We consent to the  incorporation  by reference  in  Registration
Statements  No.  333-30543  and No. 333-33649 of Beneficial  Corporation on
Form S-3 and  Registration  Statements No. 333-37295 and No. 333-02737
of Beneficial  Corporation  on Form S-8 of our report dated  January 28, 1998,
appearing in the Annual Report on Form 10-K of Beneficial Corporation for the
year ended December 31, 1997.


/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Parsippany, New Jersey
March 30, 1998



<PAGE>

























                                EXHIBIT 24




<PAGE>


                             POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS: THAT I, ROBERT J. CALLANDER, a Director
of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of March,
1998.



                                                       /s/ ROBERT J. CALLANDER
                                                           ROBERT J. CALLANDER


<PAGE>


                                POWER OF ATTORNEY


         KNOW  ALL  MEN  BY  THESE  PRESENTS:  THAT  I,  FINN M.W. CASPERSEN,  a
Director  of  Beneficial Corporation,  One Christina Centre, 301 North Walnut
Street,  Wilmington,  Delaware 19801 (the "Company"), do hereby make, constitute
and appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY,
officers of  the  Company,  or any  of  them,  with  full  power  to  act
without  the  others,  my  true  and  lawful attorney-in-fact  or agent for me
and in my name,  place and  stead,  in any and all  capacities,  to sign the
Annual  Report on Form 10-K for the fiscal year ended December 31, 1997 pursuant
to the  Securities  Exchange Act of 1934,  as  amended,  and any  amendment
thereto,  to be filed by  Beneficial  Corporation,  a Delaware corporation, with
the Securities and Exchange Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of March,
1998.



                                                      /s/ FINN M. W. CASPERSEN
                                                          FINN M. W. CASPERSEN


<PAGE>

                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:  THAT I, ROBERT C. CLARK, a Director of
Beneficial   Corporation,   One  Christina  Centre,  301  North  Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of March,
1998.



                                                        /s/ ROBERT C. CLARK
                                                            ROBERT C. CLARK


<PAGE>


                                 POWER OF ATTORNEY


         KNOW ALL MEN BY THESE  PRESENTS:  THAT I,  LEONARD S.  COLEMAN,  JR., a
Director of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut
Street,  Wilmington,  Delaware 19801 (the "Company"), do hereby make, constitute
and appoint  ANDREW C.  HALVORSEN,  JAMES H.  GILLIAM,  JR. and JONATHAN  MACEY,
officers  of the  Company,  or any of them,  with full power to act  without the
others,  my true and  lawful  attorney-in-fact  or agent  for me and in my name,
place and stead,  in any and all  capacities,  to sign the Annual Report on Form
10-K for the fiscal  year ended  December  31, 1997  pursuant to the  Securities
Exchange Act of 1934,  as amended,  and any  amendment  thereto,  to be filed by
Beneficial Corporation, a Delaware corporation, with the Securities and Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of March,
1998.



                                                    /s/ LEONARD S. COLEMAN, JR.
                                                        LEONARD S. COLEMAN, JR.


<PAGE>


                                   POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:  THAT I, DAVID J. FARRIS, a Director of
Beneficial   Corporation,   One  Christina  Centre,  301  North  Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of March,
1998.



                                                         /s/ DAVID J. FARRIS
                                                             DAVID J. FARRIS


<PAGE>


                               POWER OF ATTORNEY


         KNOW ALL MEN BY  THESE  PRESENTS:  THAT I,  JAMES H.  GILLIAM,  JR.,  a
Director of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut
Street,  Wilmington,  Delaware 19801 (the "Company"), do hereby make, constitute
and appoint ANDREW C. HALVORSEN and JONATHAN MACEY,  officers of the Company, or
either of them,  with full power to act  without  the other,  my true and lawful
attorney-in-fact or agent for me and in my name, place and stead, in any and all
capacities,  to sign the Annual  Report on Form 10-K for the  fiscal  year ended
December 31, 1997 pursuant to the  Securities  Exchange Act of 1934, as amended,
and any amendment  thereto,  to be filed by Beneficial  Corporation,  a Delaware
corporation, with the Securities and Exchange Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of March,
1998.



                                                     /s/ JAMES H. GILLIAM, JR.
                                                         JAMES H. GILLIAM, JR.


<PAGE>


                            POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS: THAT I, ANDREW C. HALVORSEN, a Director
of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint JAMES H. GILLIAM,  JR. and JONATHAN MACEY,  officers of the Company,  or
either of them,  with full power to act  without  the other,  my true and lawful
attorney-in-fact or agent for me and in my name, place and stead, in any and all
capacities,  to sign the Annual  Report on Form 10-K for the  fiscal  year ended
December 31, 1997 pursuant to the  Securities  Exchange Act of 1934, as amended,
and any amendment  thereto,  to be filed by Beneficial  Corporation,  a Delaware
corporation, with the Securities and Exchange Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.



                                                      /s/ ANDREW C. HALVORSEN
                                                          ANDREW C. HALVORSEN


<PAGE>


                              POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS: THAT I, ROLAND A. HERNANDEZ, a Director
of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of March,
1998.



                                                   /s/ ROLAND A. HERNANDEZ
                                                       ROLAND A. HERNANDEZ


<PAGE>


                               POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS:  THAT I, J. ROBERT HILLIER,  a Director
of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.



                                                      /s/ J. ROBERT HILLIER
                                                          J. ROBERT HILLIER


<PAGE>


                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE  PRESENTS:  THAT I, GERALD L. HOLM, a Director of
Beneficial   Corporation,   One  Christina  Centre,  301  North  Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of March,
1998.



                                                      /s/ GERALD L. HOLM
                                                          GERALD L. HOLM


<PAGE>


                               POWER OF ATTORNEY


         KNOW ALL MEN BY THESE  PRESENTS:  THAT I, THOMAS H. KEAN, a Director of
Beneficial   Corporation,   One  Christina  Centre,  301  North  Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of March,
1998.



                                                          /s/ THOMAS H. KEAN
                                                              THOMAS H. KEAN


<PAGE>


                               POWER OF ATTORNEY


         KNOW ALL MEN BY THESE  PRESENTS:  THAT I, STEVEN MULLER,  a Director of
Beneficial   Corporation,   One  Christina  Centre,  301  North  Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN, JAMES H. GILLIAM, JR. and. JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of March,
1998.



                                                      /s/ STEVEN MULLER
                                                          STEVEN MULLER


<PAGE>


                               POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS: THAT I, SUSAN JULIA ROSS, a Director of
Beneficial   Corporation,   One  Christina  Centre,  301  North  Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.



                                                        /s/ SUSAN JULIA ROSS
                                                            SUSAN JULIA ROSS


<PAGE>


                                 POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS: THAT I, CHARLES H. WATTS, II a Director
of  Beneficial  Corporation,  One  Christina  Centre,  301 North Walnut  Street,
Wilmington,  Delaware  19801 (the  "Company"),  do hereby make,  constitute  and
appoint ANDREW C. HALVORSEN,  JAMES H. GILLIAM, JR. and JONATHAN MACEY, officers
of the Company,  or any of them,  with full power to act without the others,  my
true and  lawful  attorney-in-fact  or agent  for me and in my name,  place  and
stead, in any and all capacities, to sign the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 pursuant to the  Securities  Exchange Act of
1934,  as  amended,  and  any  amendment  thereto,  to be  filed  by  Beneficial
Corporation,   a  Delaware   corporation,   with  the  Securities  and  Exchange
Commission.

         IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March,
1998.



                                                 /s/ CHARLES H. WATTS, II
                                                     CHARLES H. WATTS, II