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                                                                File No. 70-8627


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form U-1

                                AMENDMENT NO. 2

                            APPLICATION-DECLARATION
                                     UNDER
                 THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935


                         THE COLUMBIA GAS SYSTEM, INC.
                               20 Montchanin Road
                             Wilmington, DE  19807


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              (Name of Company or Companies Filing This Statement
               and Addresses of the Principal Executive Offices)


                         THE COLUMBIA GAS SYSTEM, INC.

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               (Name of Top Registered Holding Company Parent of
                          Each Applicant or Declarant)


                            L. J. BAINTER, TREASURER
                         The Columbia Gas System, Inc.
                               20 Montchanin Road
                             Wilmington, DE  19807


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               (Name and Address of Principal Agent for Service)
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     The Application-Declaration, as previously filed and amended, is hereby
further amended as follows:

Item 1.  Description of Proposed Transaction

     (a)   Furnish a reasonably detailed and precise description of the
proposed transaction, including a statement of the reasons why it is desired
to consummate the transaction and the anticipated effect thereof.  If the
transaction is part of a general program, describe the program and its
relation to the proposed transaction.

     I.    The following changes are to reflect the Securities Litigation

Settlement including a change in reference from "Securities Litigation

Settlement Offer" to Securities Litigation Settlement:

     The third paragraph on page 16 is deleted and replaced in its entirety by

the following:

        "Further, Columbia expects to repurchase from the leveraged

     employee stock ownership ("LESOP") portion of the Employees' Thrift

     Plan of Columbia Gas System (the "Thrift Plan") all shares (the

     "LESOP Shares") held in the common stock fund which have not been

     allocated to employees, to hold the LESOP Shares as treasury shares

     and to use the LESOP Shares for one or more of the following

     purposes as deemed appropriate by Columbia: (i) to sell all or a

     part of the LESOP Shares on the open market for cash, (ii) to

     reissue all or part of the LESOP Shares to fund additional

     requirements under the TCO Guarantee, (iii) to reissue all or part

     of the LESOP Shares to fund the Securities Litigation Settlement as

     described below, and (iv) to fund an employee benefit plan."
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The first full paragraph on page 17 is deleted and replaced in its entirety by

the following:

        "Columbia proposes the possible issuance of Columbia Common Stock

     (in addition to any LESOP Shares) on behalf of Columbia Transmission

     in connection with the TCO Guarantee and, as described below, to

     fund the Securities Litigation Settlement.  The Columbia Plan also

     proposes certain amendments to Columbia's Certificate of

     Incorporation and the assumption by the Debtors of the Tax

     Allocation Agreement which provides for the allocation of tax

     benefits and liabilities among System affiliates."



     The second paragraph on page 33 is deleted and replaced in its entirety

by the following:

        "It is Columbia's intention to hold the LESOP Shares in its

     treasury and to use the LESOP Shares for one or more of the

     following purposes as Columbia deems appropriate: (i) to sell all or

     part of the LESOP Shares for cash in the open market, (ii) to use

     all or part of the LESOP Shares to fund the TCO Guarantee, (iii) to

     use all or part of the LESOP Shares to fund the Securities

     Litigation Settlement and (iv) to fund an employee benefit program."



     On page 33, Section III.E, "Potential Offering of Columbia Securities in

Connection with Settlement of Securities Litigation" is replaced in its

entirety by the following:

        "The Columbia Plan also seeks Bankruptcy Court approval of

     Columbia's participation in a settlement of securities class action

     litigation brought against
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     Columbia, certain present and former officers and directors of

     Columbia and Columbia Transmission, the public accounting firm of

     Arthur Andersen, L.L.P. and certain underwriter's for Columbia's

     1990 common stock offering, who are defendants in the litigation

     (the "Securities Litigation Settlement").  Pursuant to the

     Securities Litigation Settlement, Columbia and the various 

     non-debtors will establish a settlement fund of $36.5 million

     (approximately $16.5 million of which will be contributed by

     Columbia) to settle the class action claims.  The settlement fund

     will be applied to pay District Court-approved counsel fees and

     costs of administration, with the remainder of the fund distributed

     to holders of the claims based on acquisitions of Columbia Common

     Stock from January 19, 1990 to June 19, 1991.  The Securities

     Litigation Settlement is conditioned upon the approval of the

     District Court and the Bankruptcy Court.

        Columbia, without admitting any wrongdoing or liability, has

     agreed to the proposed Securities Litigation Settlement primarily to

     avoid costly and time-consuming litigation and to facilitate the

     reorganization process.

        Holders of securities claims may elect, by submitting a form, to

     opt-out of the class action and not participate in or be bound by

     the Securities Litigation Settlement.  In order to preserve any

     securities claims it may have against Columbia, an opt-out

     securities claimant must indicate on its opt-out form that it elects

     to pursue its claim against Columbia in the District Court sitting

     in
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     bankruptcy.  Columbia intends to object to and/or seek estimation of

     the claims of opt-out claimants.  If and when such claims are

     allowed, they will be paid by Columbia in Columbia Common Stock

     valued at then current market prices or, at Columbia's option, in

     cash, or any combination of the two.

        Columbia seeks Commission authorization to issue Columbia Common

     Stock, valued at the then current market value, in an aggregate

     amount equal to all allowed amounts for opt-out claimants in excess

     of $1.5 million.  Thus the authorization for the issuance of

     Columbia Common Stock commences when the combination of Columbia's

     contribution to the settlement fund and successful opt-out claimants

     exceeds $18 million.  The Securities Litigation Settlement provides

     that it may be terminated by the defendants if the amount of

     securities as to which opt-out forms have been submitted exceeds an

     undisclosed specified amount."



     On page 37, item 8 under Section IV, "Summary of Approvals", is replaced

in its entirety by the following:

        "8)  Reissue all or a part of the LESOP Shares for one or more of

             the following purposes as Columbia deems appropriate: (i) to

             sell all of part of the LESOP Shares for cash in the open

             market, (ii) to fund the TCO Guarantee, (iii) to fund the

             Securities Litigation Settlement and (iv) to fund an

             employee benefit program."
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        On page 38, item 10 under Section IV, "Summary of Approvals", is

replaced in its entirety by the following:

        "10)  Issue shares of Columbia Common Stock to effectuate payment

              of Columbia's portion of any payment to claimants opting

              out of the Securities Litigation Settlement which causes

              the aggregate of Columbia's payment to the settlement fund

              and payments to such opt-out claimants to exceed of

              $18 million."



     II.      Delete the paragraph beginning on the fourth line on page 10 and

ending with the seventh line on page 11 of Amendment No. 1 to the Application-

Declaration and substitute the following:

        "The aggregate projected distribution to Producers under the TCO

     Plan totals approximately $1.2 billion.  The Producer Agreement

     reflects agreements with Initial Accepting Producers representing

     approximately 80% of that value or approximately $960 million, while

     distributions on settlement values attributable to all other

     Producers aggregate approximately $240 million.  Initial Accepting

     Producers agreed to a 5% holdback from the distributions due to them

     (approximately $48 million at the 80% acceptance level but subject

     to increase as additional Producers accept)  and have agreed that,

     to the extent that claim values in excess of the settlement values

     contained in the TCO Plan are agreed to or allowed, the holdback

     will be applied with dollar for dollar matching by Columbia

     Transmission (and Columbia under the
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     TCO Guarantee) to pay the ultimate distribution.  On July 20, 1995,

     a motion was filed with the Bankruptcy Court for approval of

     settlement agreements with producers representing an additional 6%

     of the settlement values in the TCO Plan.

        The claims mediator requested that Producers either file their

     claims recalculation forms or notify Columbia Transmission of their

     acceptance of the proposed settlement amounts by June 30, 1995.

     Columbia Transmission is in the process of analyzing the filed

     recalculated claims and a discussion of the filed recalculated

     claims will be included in the Quarterly Report on Form 10-Q for the

     Quarter Ended June 30, 1995 which will be incorporated into the

     Disclosure Statement (Exhibit D-2 to this Application-Declaration)

     as an exhibit and mailed with the solicitation materials.  That

     Form10-Q will be incorporated into this Application-Declaration by

     reference upon filing."

Item 2.  Fees, Commissions and Expenses

     (a) State (1) the fees, commissions and expenses paid or incurred, or to
be paid or incurred, directly or indirectly, in connection with the proposed
transaction by the applicant or declarant or any associate company thereof,
and (2) if the proposed transaction involves the sale of securities at
competitive bidding, the fees and expenses to be paid to counsel selected by
applicant or declarant to act for the successful bidder.

     There are set forth below the estimated fees and expenses expected to be

incurred in connection with Columbia's bankruptcy and the proposed transactions

described in this Application-Declaration other than those which are subject to

the approval of the Bankruptcy Court.  All payments for nonaffiliated 

professional services are subject to the approval of the
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Bankruptcy Court pursuant to the Bankruptcy Code and therefore, pursuant to 

Rule 63, need not be approved by this Commission.

                                                                                                          
         Securities and Exchange Commission Filing Fee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $ 2,000

         Services of Columbia Gas System Service Corporation  
            since 7/31/91 and projected to emergence  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,000,000*

         Printing, solicitation of votes and tabulation of votes  . . . . . . . . . . . . . . . . . . . . . . . . .     1,020,000*

         Miscellaneous and other incidental expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        50,000*
                                                                                                                   --------------

                 Total  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $ 8,072,000

         *  estimated

         

 Item 6.  Exhibits and Financial Statements

     D-1  Columbia Gas Transmission Corporation Plan of Reorganization and
          Disclosure Statement (filed herewith by incorporation by reference
          to the Plan of Reorganization and Disclosure Statement filed in File
          No. 1-1098 on August 4, 1995)

     D-2  The Columbia Gas System, Inc. Plan of Reorganization and Disclosure
          Statement (filed herewith by incorporation by reference to the Plan
          of Reorganization and Disclosure Statement filed in File No. 1-1098
          on August 4, 1995)

     D-3  Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
          (to be filed by amendment)

     F    Opinion of Counsel (to be filed by amendment)
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                                   SIGNATURE

     Pursuant to the requirements of the Public Utility Holding Company Act of

1935, the undersigned company has duly caused this Application-Declaration to

be signed on its behalf by the undersigned thereunto duly authorized.



                              THE COLUMBIA GAS SYSTEM, INC.


Date: August 8, 1995          By:   /s/ L. J. BAINTER        
                                  --------------------------
                                        L. J. Bainter
                                          Treasurer
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EXHIBIT INDEX

   (a)  Exhibits

      D-1   Columbia Gas Transmission Corporation Plan of Reorganization and
            Disclosure Statement (filed herewith by incorporation by reference
            to the Plan of Reorganization and Disclosure Statement filed in
            File No. 1-1098 on August 4, 1995)

      D-2   The Columbia Gas System, Inc. Plan of Reorganization and
            Disclosure Statement (filed herewith by incorporation by reference
            to the Plan of Reorganization and Disclosure Statement filed in
            File No. 1-1098 on August 4, 1995)

      D-3   Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
            (to be filed by amendment)

      F     Opinion of Counsel (to be filed by amendment)