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):    October 16, 1998


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 Third Quarter Financial 
Release dated October 16, 1998 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 the markets it serves.

Turmoil in World Financial Markets
- ----------------------------------
Turmoil in world financial markets over the past month has made 
forecasting particularly difficult.  Business confidence plays an 
important role in the purchase decision and recent events in 
financial markets, including difficulties experienced by hedge funds, 
have increased uncertainty and reduced confidence.  The chairman 
of the Federal Reserve, Alan Greenspan, also recently noted the 
worldwide flight to liquidity and increased aversion to risk which, 
in the first instance have significantly reduced the flow of 
credit to emerging markets, and in the second instance have contributed 
to signs of an emerging credit crunch in certain segments of the U.S. 
credit markets.  If a credit crunch were to develop, funding for 
projects would be more difficult to obtain and could negatively 
impact projects worldwide and the U.S. non-residential construction
market in particular.  The current outlook assumes that financial 
turmoil subsides over the next few months but that business 
confidence will be impacted to some degree and that non-residential 
construction in particular will be negatively impacted.

Events in Asia, Latin America and Russia
- ----------------------------------------
Unforeseen events in Asia or Latin America could impact sales.  Our 
current assessment calls for continued deep recession in Japan, 
Korea, Thailand, Indonesia, Malaysia, and Hong Kong and recession or 
weak growth in many other Southeast Asian developing countries.  
In Latin America, economies have slowed noticeably due to high interest 
rates but the region as a whole is expected to avoid recession.  
This assessment presumes the  two regions' currencies and stock markets 
stabilize over the next several months and that the impact of these 
events is limited outside the two regions to slower economic growth 
in the U.S. and Canada and to lower world commodity prices.  
If the region's currencies and/or stock markets fail to stabilize, 
if China, Hong Kong, or Brazil were to devalue, or if Japan were 
to experience a financial collapse, then the impact on world 
growth and industry demand would be more severe which could result 
in lower company sales.  Company sales also could be negatively 
impacted by a greater than anticipated flow of new and used equipment 
from weak Asian markets to the rest of the world which could exert 
pressure on both price realization and share of industry sales.  

Recent events also highlight the risks in Russia which has slipped back 
into severe recession.  Political and economic instability is very high 
and a further deterioration could impact worldwide stock or currency 
markets, which in turn could weaken Company sales.

Monetary and Fiscal Policies
- ----------------------------
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 fails to cut interest rates quickly 
enough in response to a significant decline in world stock markets, 
the U.S. economy could slow and negatively impact demand for the 
Company's products.  In general, high interest rates, reductions 
in government spending, higher taxes, significant currency devaluations, 
and uncertainty over key policies are some factors likely to lead to 
slower economic growth and lower industry demand.  The current outlook 
is for slower U.S. growth in 1999 and not recession.  If, for whatever 
reason, the U.S. were to enter a recession then demand for Company 
products would fall in the U.S. and Canada and would also be lower 
throughout the rest of the world.

Political Factors
- -----------------
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. 
this year could impact the Company's ability to expand 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 make potential economic 
growth difficult to predict for those countries.

Currency Fluctuations
- ---------------------
Currency fluctuations are also a significant unknown for global companies.  
If the U.S. dollar strengthens against foreign currencies, the Company's 
ability to realize price increases on sales could be negatively impacted.  Most 
of the Company's key competitors have their principal manufacturing operations 
based in Japan or European countries.  The majority of our manufacturing assets 
are in the United States.  Consequently, should an overvalued dollar persist, 
our costs compared with these competitors would be relatively higher.  As a 
major net exporter from the United States, the persistence of an overvalued 
dollar, over time, could have an unfavorable impact on our global 
competitive position.

Dealer Practices
- ----------------
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.

Other Factors
- -------------
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 these activities 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 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.

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:  October 16, 1998