SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549


FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934


Date of Report (Date of earliest event reported): July 16,
1996


CATERPILLAR INC.
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of incorporation)

1-768
(Commission File Number)

37-0602744
(IRS Employer I.D. No.)

100 NE Adams Street, Peoria, Illinois
(Address of principal executive offices)

61629
(Zip Code)

Registrant's telephone number, including area
code:
(309) 675-1000


Item 5.         Other Events

SAFE HARBOR STATEMENT UNDER THE SECURITIES
LITIGATION REFORM ACT OF 1995

     The information included in the "Economic
and Industry Outlook" and "Company Outlook"
sections of the Company's Second Quarter 1996
Financial Review dated July 16,
1996 is forward looking and involves
uncertainties that could significantly impact
expected results.    These uncertainties include
factors that affect all international businesses,
as well as matters specific to the Company and
markets it serves.

For most companies operating in a global economy,
monetary and fiscal policies implemented in the
U.S. and abroad could have a significant impact
on economic growth, and, accordingly, demand for
a product.  For example, if the Federal Reserve
raises interest rates later this year, the U.S.
economy could slow and negatively impact demand
for the Company's products.  If  low interest
rates in Europe do not stimulate that economy in
the second half of this year, the demand for
Company products in that region could be
negatively impacted.

     Political factors in the U.S. and abroad
also have a major impact on global companies.
The Company is one of the largest U.S. exporters
as a percentage of sales. International trade and
fiscal policies implemented in the U.S. resulting
from national elections or other political
actions this year could impact the Company's
ability to grow its business abroad.  U.S.
foreign relations with certain countries and any
related restrictions imposed could also have a
significant impact on foreign sales.  In
addition, political instability in regions such
as the CIS and China make potential economic
growth difficult to predict for those countries.

     Currency fluctuations are also a significant
unknown for global companies.  If the U.S. dollar
continues to strengthen against foreign
currencies, the Company's ability to realize
price increases on sales outside the U.S. could
be negatively impacted.  Partially offsetting
this negative is the fact that weaker foreign
currencies may reduce costs related to
manufacturing Company products abroad.

     In addition to these factors, there are
uncertainties related to the Company's industry
and specific operations.  A major factor
contributing to the Company's success is its
dealer distribution network.  Dealer practices,
such as changes in inventory levels for both new
and rental equipment, are not within the
Company's control (primarily because these
practices depend upon the dealer's assessment of
anticipated sales) and may have a significant
positive or negative impact on our results.

  The rate of infrastructure spending, housing
                     starts,
commercial construction and mining also play a
significant role in the Company's results.  Our
products are an integral component of these
activities and as they increase or decrease in
the U.S. or abroad, demand for our products may
be significantly impacted.



     The Company operates in a highly competitive
environment and our outlook depends on a forecast
of the Company's percentage of industry sales.  A
reduction in that percentage could result from
unanticipated pricing or product strategies
pursued by competitors, unanticipated product or
manufacturing difficulties,  a failure to price
the product competitively, or an unexpected
buildup in competitors' new machine or dealer
owned rental fleets.  Competitive pressures have
resulted in a decline in percentage of industry
sales in the U.S. and Canada in the first half of
the year.  If those pressures continue to have an
impact, sales for the second half of this year
could fall below current projections.

     Labor relations with the United Auto Workers
remain an uncertainty.  The Company has
demonstrated its ability to address a prolonged
strike by the UAW, as well as the return-
to-work process following strike recess, with no
material impact on Company results.  Because the
UAW recently rejected a new six-year contract
proposal from the Company, however, their future
actions and potential impact are a contingency.
     This discussion of uncertainties is by no
means exhaustive but is designed to highlight
important factors that may impact our outlook.
Obvious factors such as general economic
conditions throughout the world do not warrant
further discussion but are noted to further
emphasize the myriad of contingencies that may
cause the Company's actual results to differ from
those currently anticipated.
SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.


CATERPILLAR INC.

By:    /s/R. Rennie Atterbury III

           R. Rennie Atterbury III
              Vice President
Date:  July 16, 1996