PAGE 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
-----------------------

FORM 10-Q

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from            to
----------    ----------
Commission file number 1-8339

NORFOLK SOUTHERN CORPORATION
- -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Virginia                             52-1188014
- ----------------------------------------  -------------------------------
(State or other jurisdiction of      (IRS Employer Identification No.)
incorporation or organization)

Three Commercial Place
Norfolk, Virginia                        23510-2191
- ----------------------------------------  -------------------------------
(Address of principal executive offices)            Zip Code

Registrant's telephone number, including area code    (757) 629-2680
----------------------

No Change
- -------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)

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 (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. (X) Yes  ( ) No

The number of shares outstanding of each of the registrant's classes of
Common Stock, as of the last practicable date:

Class                 Outstanding as of July 31, 1998
-----                 --------------------------------

Common Stock (par value $1.00)       378,950,693 (excluding
21,627,902 shares held by
registrant's consolidated
subsidiaries)

PAGE 2

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

INDEX
-----

Page
----
Part  I. Financial Information:

Item 1.   Consolidated Statements of Income
Three Months and Six Months Ended
June 30, 1998 and 1997                          3-4

Consolidated Balance Sheets
June 30, 1998, and December 31, 1997              5

Consolidated Statements of Cash Flows
Six Months Ended June 30, 1998 and 1997         6-7

Notes to Consolidated Financial Statements     8-14

Item 2.   Management's Discussion and Analysis of
Financial Condition and Results of Operations 15-23

Part II. Other Information:

Item 4.   Submission of Matters to a Vote of
Security Holders                                 24

Item 6.   Exhibits and Reports on Form 8-K                 24

Signatures                                                          25

Index to Exhibits                                                   26

PAGE 3

PART I.  FINANCIAL INFORMATION
------------------------------

Item 1.   Financial Statements.
- ------    --------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions except per share amounts)
(Unaudited)

Three Months Ended   Six Months Ended
June 30,            June 30,
1998      1997      1998      1997
-------   -------   -------   -------

Railway operating revenues:
Coal                              $  316    $  326    $  639    $  652
General merchandise                  622       606     1,227     1,200
Intermodal                           141       135       279       261
------    ------    ------    ------
Total railway
operating revenues         1,079     1,067     2,145     2,113
------    ------    ------    ------
Railway operating expenses:
Compensation and benefits            365       352       761       714
Materials, services and rents        206       176       396       345
Depreciation                         109       104       216       207
Diesel fuel                           45        55        93       118
Casualties and other claims           22        25        52        54
Other                                 39        34        83        73
------    ------    ------    ------
Total railway
operating expenses           786       746     1,601     1,511
------    ------    ------    ------
Income from
railway operations           293       321       544       602

Equity in earnings
of Conrail (Note 3)                   50        23        82        23
Other income - net                     39        23        72        52
Interest expense on debt (Note 3)    (127)      (86)     (255)     (124)
Charge for credit
facility costs (Note 3)               --        --        --       (77)
------    ------    ------    ------
Income from continuing
operations before
income taxes                 255       281       443       476

Provision for income taxes             68        95       124       165
------    ------    ------    ------
Income from
continuing operations        187       186       319       311
------    ------    ------    ------
Discontinued operations (Note 4):
Income (loss) from motor carrier
operations, net of taxes             --         4        (1)        7
Gain on sale of motor carrier,
net of taxes                         --        --        98        --
------    ------    ------    ------
Income from discontinued
operations                    --         4        97         7
------    ------    ------    ------

Net income                  $  187    $  190    $  416    $  318
======    ======    ======    ======

PAGE 4

Item 1.   Financial Statements.
- ------    --------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions except per share amounts)
(Unaudited)

Three Months Ended   Six Months Ended
June 30,            June 30,
1998      1997      1998      1997
-------   -------   -------   -------

Per share amounts (Note 6):
Income from continuing
operations, basic                $ 0.49    $ 0.50    $ 0.84    $ 0.83
Income from continuing
operations,diluted                 0.48      0.49      0.83      0.82
Net income, basic                   0.49      0.51      1.10      0.85
Net income, diluted                 0.48      0.50      1.09      0.84

Dividends                           0.20      0.20      0.40      0.40

See accompanying notes to consolidated financial statements.

PAGE 5

Item 1.   Financial Statements. (continued)
- ------    --------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)

June 30,   December 31,
1998         1997
---------   ------------

ASSETS
Current assets:
Cash and cash equivalents                      $    86       $    34
Short-term investments                              99           125
Accounts receivable - net                          535           552
Materials and supplies                              61            58
Deferred income taxes                               98           114
Other current assets                                98           119
Net assets of discontinued operations (Note 4)      --           101
-------       ------- 
Total current assets                           977         1,103

Investment in Conrail (Note 3)                    5,989         5,888
Other investments                                   370           333
Properties less accumulated depreciation         10,242         9,904
Other assets                                        168           122
-------       -------
TOTAL ASSETS                               $17,746       $17,350
=======       =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt                                $    --       $    27
Accounts payable                                   602           624
Income and other taxes                             175           169
Other current liabilities                          174           212
Current maturities of long-term debt (Note 5)       64            61
-------       -------
Total current liabilities                    1,015         1,093

Long-term debt (Note 5)                           7,539         7,398
Other liabilities                                   916           885
Minority interests                                   48            49

Deferred income taxes                             2,468         2,480
-------       -------
TOTAL LIABILITIES                           11,986        11,905
-------       -------
Stockholders' equity:
Common stock $1.00 per share par value             401           399
Additional paid-in capital                         287           241
Retained income                                  5,092         4,826

Less treasury stock at cost, 21,627,902 shares
and 21,757,902 shares, respectively               (20)          (21)
-------       -------
TOTAL STOCKHOLDERS' EQUITY                   5,760         5,445
-------       -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $17,746       $17,350
=======       =======

See accompanying notes to consolidated financial statements.

PAGE 6

Item 1.   Financial Statements. (continued)
- ------    --------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)

Six Months Ended
June 30,
1998       1997
-------    -------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                          $  416      $  318
Reconciliation of net income to net cash
provided by operating activities:
Depreciation                                       222         212
Deferred income taxes                                8          12
Equity in earnings of Conrail (Note 3)             (82)        (23)
Charge for credit facility costs (Note 3)           --          77
Nonoperating gains and losses on properties
and investments                                  (32)        (16)
Income from discontinued operations                (97)         (7)
Changes in assets and liabilities
affecting operations:
Accounts receivable                             19         (43)
Materials and supplies                          (3)         (2)
Other current assets                            27          28
Current liabilities other than debt              6          70
Other - net                                    (30)        (24)
------      ------
Net cash provided by
continuing operations                       454         602
Net cash used for
discontinued operations                      (2)         (4)
------      ------
Net cash provided by
operating activities                       452         598

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (Note 5)                           (472)       (464)
Property sales and other transactions                   31          43
Investment in Conrail (Note 3)                         (33)     (5,654)
Investments, including short-term                      (73)       (142)
Investment sales and other transactions                 72         124
Proceeds from sale of motor carrier (Note 4)           200          --
------      ------
Net cash used for investing activities      (275)     (6,093)

CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends                                             (151)       (150)
Common stock issued - net                               28          16
Commercial paper proceeds                              129       1,540
Credit facility costs paid (Note 3)                     --         (72)
Proceeds from long-term borrowings (Note 5)              4       4,243
Debt repayments                                       (135)       (195)
------      ------
Net cash provided by (used for)
financing activities                      (125)      5,382
------      ------
Net increase (decrease) in cash
and cash equivalents                        52        (113)

CASH AND CASH EQUIVALENTS:*
At beginning of year                                    34         207
------      ------
At end of period                                    $   86      $   94
======      ======

PAGE 7

Item 1.   Financial Statements. (continued)
- ------    --------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)

Six Months Ended
June 30,
1998       1997
-------    -------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amounts capitalized)             $  258      $   93
Income taxes                                      $   67      $  120

* Cash equivalents are highly liquid investments purchased three months
or less from maturity.

See accompanying notes to consolidated financial statements.

PAGE 8

Item 1.   Financial Statements. (continued)
- ------    --------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

1. In the opinion of Management, the accompanying unaudited interim
financial statements contain all adjustments (consisting of normal
recurring accruals) necessary to present fairly the Corporation's
financial position as of June 30, 1998, and results of operations
and cash flows for the six months ended June 30, 1998, and 1997.

Although Management believes that the disclosures presented are
adequate to make the information not misleading, these consolidated
financial statements should be read in conjunction with the
financial statements and notes included in the Corporation's latest
Annual Report on Form 10-K and subsequent Quarterly Report on 
Form 10-Q.

2. Commitments and Contingencies

There have been no significant changes since year-end 1997 in the
matters discussed in NOTE 17, COMMITMENTS AND CONTINGENCIES,
appearing in the NS Annual Report on Form 10-K for 1997, Notes to
Consolidated Financial Statements, beginning on page 78.

3. Joint Acquisition of Conrail

General
-------
On May 23, 1997, NS and CSX Corporation (CSX), through a jointly
owned entity, completed the acquisition of Conrail Inc. (Conrail)
stock tendered pursuant to their joint tender offer.  Conrail's
subsidiary, Consolidated Rail Corporation, is the major Class I
railroad in the northeast United States with approximately 10,800
route miles.  Conrail stock owned by NS and CSX was placed in a
voting trust pending effectiveness of the Surface Transportation
Board's (STB) approval of the control transaction.  On July 23,
1998, the STB approved, with certain conditions, the NS/CSX joint
application, and unless appealed, stayed or otherwise delayed, the
decision will become effective August 22, 1998 (the "Control
Date").  On the Control Date or immediately thereafter, NS and CSX
may terminate the voting trust and will be authorized to implement
the transactions contemplated in their June 10, 1997, agreement
(the "Transaction Agreement").  In addition, individuals serving as
directors of Conrail will resign, and NS and CSX will elect an
equal number of directors to the Conrail Board of Directors.

The Transaction Agreement and Post-Closing Operations
-----------------------------------------------------
The Transaction Agreement provides, among other things, that the
railroads of NS and CSX (respectively, "NSR" and "CSXT") will:
(1) separately operate portions of the routes and assets now owned
and operated by Conrail (the "Allocated Assets"), pursuant to lease
and operating agreements with two limited liability companies
(Pennsylvania Lines LLC ("PRR") and New York Central Lines LLC
("NYC")), that will be wholly owned by Conrail, and (2) jointly

PAGE 9

Item 1.   Financial Statements. (continued)
- ------    --------------------

3. Joint Acquisition of Conrail (continued)

have access to other Conrail properties that will continue to be
owned and operated by Conrail (the "Shared Assets Areas").  In
addition, Conrail will continue to provide certain system support
operations as agent for NS and CSX for a short period (all the
foregoing, collectively, the "Transaction").

The Closing Date, the date on which the Transaction will be
consummated, is contingent upon, among other things, the continuing
effectiveness of the STB's approval decision, attainment of
necessary labor implementing agreements and a determination that
integration can be accomplished safely and with a minimum of
service disruptions.  Closing is expected to occur by the end of
this year or in the first quarter of 1999.  After the Closing Date,
NSR and CSXT also will (1) employ the majority of Conrail's work
force, (2) be assigned all customer freight contracts, and (3)
provide substantially all rail freight services on Conrail-owned
lines.

It is expected that Conrail's operations will continue
substantially unchanged until the Closing Date.  After closing, the
PRR assets will be operated as an integral portion of the NSR
system, at which time NS should begin to be able to realize many of
the anticipated benefits of the transaction, which include traffic
and revenue gains, as well as operating synergies; at that time, NS
will begin to report rail operating revenues and expenses
associated with those operations directly in its financial
statements.

NS will appoint all the directors of PRR, and CSX will appoint
all the directors of NYC.  The boards of directors for PRR and
NYC will have control over the daily operations of these companies
with certain key decisions, including all modifications and changes
to the lease and operating agreements with NSR and CSXT, retained
by the Conrail board.  NS and CSX will continue to have their
respective 58 percent and 42 percent economic interests in all of
Conrail, including PRR and NYC.

The operating agreements between NSR and PRR and between CSXT and
NYC will have an initial 25-year period with two 10-year renewal
periods, renewable at the option of NSR and CSXT, respectively.
The amount of NSR's payments under its agreements with PRR will be
significant.  These payments, which will be set based upon the fair
market rental values of the PRR assets at the time the agreements 
are entered into, will be adjusted every six years based upon an 
independent party's appraisal of these assets' rental values.  All 
costs of operating and maintaining the PRR assets, including the 
risk of loss related to those assets, will be borne by NSR.  NSR 
will also pay a portion of the costs to operate over the Shared 
Assets Areas, which is expected to be based on fair value and 
related usage.

PAGE 10

Item 1.   Financial Statements. (continued)
- ------    --------------------

3. Joint Acquisition of Conrail (continued)

From time to time, NS and CSX may be requested to fund Conrail's
cash requirements through capital contributions, loans, or
advances.

Accounting Treatment
--------------------
NS has a 58 percent economic and 50 percent voting interest in the
entity that owns Conrail.  The equity method of accounting has been
applied to NS' investment in Conrail in accordance with APB No. 18,
"The Equity Method of Accounting for Investments in Common Stock."
As a result, NS' Consolidated Balance Sheet includes a $5,989 
million "Investment in Conrail" consisting of: (1) $5,794 million
representing NS' share of the cost of acquiring Conrail stock,
including fees and other costs of the purchase, and (2) $195
million for NS' equity in the undistributed earnings of Conrail
through June 30, 1998, which is net of $73 million of amortization
of the difference between NS' investment in Conrail and the
underlying equity in net assets.  NS is amortizing the difference
between the purchase price for its investment in Conrail and its
equity in the underlying assets of Conrail based on: (1) initial
estimates of the fair value of Conrail's property and equipment and
their remaining useful lives, (2) the fair values of other Conrail
assets and liabilities, and (3) the related deferred tax effect of
the bases differences.

NS' financial statements include the effects of its 58 percent
economic interest in Conrail since completion of the NS/CSX joint
acquisition of Conrail stock on May 23, 1997.  The Consolidated
Statements of Income for the three months and six months ended
June 30, 1998 and 1997, include several Conrail-related items.
NS' equity in Conrail's earnings is recorded as nonoperating income
and represents NS' portion of Conrail's net income, including items
considered in purchase accounting, and amortization of the
difference between NS' investment in Conrail and the underlying
equity in net assets, net of taxes.  Expenses associated with the
acquisition of Conrail stock, primarily interest expense on debt
and credit facility costs, including the $77 million charge
incurred in the first quarter of 1997, are recorded as nonoperating
expenses.  Integration costs are included in railway operating
expenses.

PAGE 11

Item 1.   Financial Statements. (continued)
- ------    --------------------

3. Joint Acquisition of Conrail (continued)

The following summary financial information for Conrail for its
fiscal periods ended June 30, 1998 and 1997, and at December 31,
1997, as provided by Conrail's management, should be read in
conjunction with Conrail's audited financial statements included as
an exhibit to NS' Annual Report on Form 10-K for 1997 filed with
the Securities and Exchange Commission (SEC) and Consolidated Rail
Corporation's latest Annual Report on Form 10-K and all its
subsequent Quarterly Reports on Form 10-Q filed with the SEC.

Summarized Consolidated Statements of Income - Conrail
------------------------------------------------------

Three Months Ended   Six Months Ended
June 30,            June 30,
1998      1997      1998      1997
--------  --------  --------  --------
($ in millions)
(Unaudited)

Operating revenues          $   983   $   937   $ 1,910   $ 1,843
Operating expenses              777     1,168     1,544     1,958
-------   -------   -------   -------
Operating income (loss)      206      (231)      366      (115)
Other-net                       (20)      (21)      (43)      (38)
-------   -------   -------   -------
Income (loss) before
income taxes                186      (252)      323      (153)
Provision for income taxes       71        22       123        60
-------   -------   -------   -------
Net income (loss)        $   115   $  (274)   $  200   $  (213)
=======   =======   =======   =======

Conrail's operating expenses for the three months and six months
ended June 30, 1997, included the following: (1) a $221 million
charge in conjunction with the termination of the Conrail ESOP, and
(2) $173 million ($142 million after taxes) for merger-related
stock compensation and severance benefits that NS treated as a cost
of the acquisition of Conrail stock.

PAGE 12

Item 1.   Financial Statements. (continued)
- ------    --------------------

3. Joint Acquisition of Conrail (continued)

Summarized Consolidated Balance Sheets - Conrail
------------------------------------------------

June 30,     December 31,
1998           1997
------------   ------------
($ in millions)
(Unaudited)

Assets
Current assets                       $    911       $    954
Noncurrent assets                       7,671          7,530
--------       --------
Total assets                       $  8,582       $  8,484
========       ========
Liabilities and stockholders' equity
Current liabilities                  $  1,167       $  1,208
Noncurrent liabilities                  3,935          4,111
Stockholders' equity                    3,480          3,165
--------       --------
Total liabilities and
stockholders' equity             $  8,582       $  8,484
========       ========

4. Discontinued Operations - Motor Carrier

On January 12, 1998, NS announced an agreement to sell all the
common stock of its motor carrier subsidiary, North American Van
Lines, Inc. (NAVL).  Accordingly, NAVL's results of operation,
financial position and cash flows are presented as "discontinued
operations" in the accompanying financial statements.

On March 28, 1998, NS closed the sale of NAVL for $200 million in
cash and recorded an $83 million pretax ($98 million, or $0.26 per
share, after-tax) gain.  The higher after-tax gain was the result
of differences between book and tax bases and the realization of
deferred tax benefits.  The purchase price is subject to adjustment
based on NAVL's net working capital at the time of closing.
Management expects that any such adjustment will be immaterial.

NAVL's revenues were $207 million in the first quarter of 1998,
$237 million in the second quarter of 1997, and $441 million for
the first six months of 1997.  These amounts are not included in
revenues in the accompanying income statements.  Loss from motor
carrier operations was $1 million in the first quarter of 1998;
income from these operations was $4 million, or $0.01 per share, in
the second quarter of 1997, and $7 million, or $0.02 per share, for
the first six months of 1997.

PAGE 13

Item 1.   Financial Statements. (continued)
- ------    --------------------

5. Capital Lease Obligations

During the first six months of 1998 and 1997, a rail subsidiary of
NS entered into capital leases covering new locomotives.  The
related capital lease obligations, totaling $127 million in 1998
and $64 million in 1997, were reflected in the Consolidated Balance
Sheets as debt and, because they were non-cash transactions, were
excluded from the Consolidated Statements of Cash Flows.  The lease
obligations carry stated interest rates of between 6.36 percent and
6.70 percent for the leases entered into in 1998, and 6.83 percent
and 7.40 percent for those entered into in 1997.  All were
converted to variable rate obligations using interest rate swap
agreements.  The interest rates on these obligations are based on
the six-month London Interbank Offered Rate and are reset every six
months with realized gains or losses accounted for as an adjustment
of interest expense over the terms of the leases.  As a result, NS
is exposed to the market risk associated with fluctuations in
interest rates.  To date, the effects of the rate fluctuations have
been favorable and not material.  Counterparties to the interest
rate swap agreements are major financial institutions believed by
Management to be creditworthy.

6. Earnings Per Share

The following table sets forth the reconciliation of the number of
weighted-average shares outstanding used in the calculations of
basic and diluted earnings per share:

Three Months Ended      Six Months Ended
June 30,               June 30,
1998       1997        1998       1997
------     ------      ------     ------
(In millions)

Weighted-average shares
outstanding                 378.8      376.5       378.3      376.1

Dilutive effect of
outstanding options and
performance share units
(as determined by the
application of the
treasury stock method)        2.7        3.3         2.9        3.3
-----      -----       -----      -----

Diluted weighted-average
shares outstanding          381.5      379.8       381.2      379.4
=====      =====       =====      =====

There are no adjustments to "Net income" or "Income from continuing
operations" for the diluted earnings per share computations.

PAGE 14

Item 1.   Financial Statements. (continued)
- ------    --------------------

7. Tax Benefit Leases

In January 1995, the United States Tax Court issued a preliminary
decision that disallowed some of the tax benefits a subsidiary of
NS purchased from a third party in 1981 pursuant to a safe harbor
lease agreement.  The Tax Court finalized this decision in February
1997, and the Fourth Circuit Court of Appeals affirmed it.  A
petition for rehearing and request that the case be heard by the
full court was filed and denied.  A petition is expected to be
filed requesting that the U.S. Supreme Court consider the case, but
there can be no assurance that the petition will be granted.
Management continues to believe that NS ultimately should incur no
loss as a result of this decision because the lease agreement
provides for full indemnification if any such disallowance is
sustained.

8. Comprehensive Income

Effective January 1, 1998, NS adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income."
This Statement requires that all items that are recognized under
accounting standards as components of comprehensive income be
reported in an annual financial statement displayed with the same
prominence as other annual financial statements.  Condensed
financial statements of interim periods are to include a total for
comprehensive income.  NS' total comprehensive income was as
follows:

Three Months Ended     Six Months Ended
June 30,               June 30,
1998       1997       1998        1997
----       ----       ----        ----
($ in millions)

Net income                     $187       $190       $416       $318

Other comprehensive income       --         13          1          1
----       ----       ----       ----
Total comprehensive income  $187       $203       $417       $319
====       ====       ====       ====

For NS, "Other comprehensive income" is the unrealized gains and 
losses on certain investments in debt and equity securities.  
Accumulated other comprehensive income included in retained earnings 
was $6 million as of June 30, 1998, and $5 million as of December 31,
1997.

PAGE 15

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations.
-------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations

RESULTS OF OPERATIONS

Net Income
- ----------
Net income for the second quarter of 1998 was $187 million, a decrease of
$3 million, or 2 percent, compared with the second quarter of 1997.  Net
income for the first six months of 1998 was $416 million, an increase of
$98 million, or 31 percent, compared with the same period last year.  The
improvement was attributable to a $98 million after-tax gain in the first
quarter from the sale of NS' motor carrier subsidiary, North American Van
Lines, Inc. (NAVL), which is included in "Income from discontinued
operations" (see Note 4).  Second-quarter income from continuing
operations was $187 million, an increase of $1 million, or 1 percent, and
for the first six months was $319 million, up $8 million, or 3  percent.
Included in both years' results were several Conrail-related items,
primarily interest expense on the $5.8 billion of debt incurred to
finance the acquisition, integration costs included in railway operating
expenses, NS' equity in the earnings of Conrail, and the first-quarter
1997 pretax charge of $77 million for credit facility costs.  These items
reduced second-quarter 1998 and 1997 net income and income from
continuing operations by $37 million and $10 million, respectively, and
for the first six months, by $87 million and $62 million.  Absent the
Conrail-related items, income from continuing operations would have been
$224 million in the second quarter, up $28 million, or 14 percent, and
would have been $406 million for the first six months, up $33 million, or
9 percent.  For both periods, higher nonoperating income and a lower
effective tax rate more than offset lower income from railway operations.

Railway Operating Revenues
- --------------------------
Second-quarter railway operating revenues were $1,079 million, up
$12 million, or 1 percent, compared with last year.  For the first six
months, railway operating revenues were $2,145 million, up $32 million,
or 2 percent.  As shown in the table below, the improvements were due
entirely to higher traffic volume.

Second Quarter      First Six Months
1998 vs. 1997        1998 vs. 1997
Increase (Decrease)  Increase (Decrease)
------------------   ------------------
($ in millions)

Traffic volume (carloads)      $  39                 $  86
Revenue per unit                 (27)                  (54)
-----                 -----
$  12                 $  32
=====                 =====

PAGE 16

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

Revenues and carloads for the commodity groups were as follows:

Revenues
------------------------------------------
Second Quarter          Six Months
1998       1997        1998       1997
-------    -------     -------    -------
($ in millions)

Coal                       $  316      $  326     $  639      $  652

Chemicals                     145         150        291         297
Automotive                    145         132        283         256
Paper/clay/forest             139         134        276         269
Metals/construction            98          95        189         184
Agr./govt./consumer            95          95        188         194
------      ------     ------      ------
General merchandise        622         606      1,227       1,200

Intermodal                    141         135        279         261
------      ------     ------      ------
Total                   $1,079      $1,067     $2,145      $2,113
======      ======     ======      ======

Carloads
------------------------------------------
Second Quarter          Six Months
1998       1997        1998       1997
-------    -------     -------    -------
(in thousands)

Coal                          327         328        658         655

Chemicals                     102         102        204         203
Automotive                    127          97        243         189
Paper/clay/forest             117         114        233         229
Metals/construction            97          99        185         186
Agr./govt./consumer            86          89        175         180
------      ------     ------      ------
General merchandise        529         501      1,040         987

Intermodal                    375         373        742         715
------      ------     ------      ------
Total                    1,231       1,202      2,440       2,357
======      ======     ======      ======

PAGE 17

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

Coal
- ----
Second-quarter coal revenues were 3 percent below last year and were
2 percent lower for the first six months, reflecting a change in the
mix of traffic: increased utility coal shipments (especially new
shorter-haul business) and decreased export and domestic
metallurgical coal shipments.  Total tonnage handled for both
periods increased 2 percent over last year as gains in utility and
coke traffic more than offset declines in export volume and domestic
metallurgical traffic.  Utility tonnage increased 13 percent in the
second quarter and 11 percent for the first six months.  Traffic in
both periods benefited from new shorter-haul (lower average revenue)
business.  Increased shipments to replenish utilities' unusually low
stockpiles and to meet demand while several nuclear facilities were
down for maintenance also contributed to the second-quarter
increase.  Export tonnage decreased 13 percent in the second quarter
and 9 percent for the first six months, principally due to the
strong dollar.  Domestic metallurgical tonnage declined 14 percent
for the quarter and 13 percent for the first six months, primarily
due to the closure, as anticipated, of two large coking plants.

For the remainder of the year, this general traffic mix is expected
to continue, with the result that coal revenues are likely to be
slightly below last year's levels.

General Merchandise
- -------------------
Second-quarter general merchandise revenues were 3 percent above
last year and were 2 percent higher for the first six months.  In
both periods, the increases were principally due to higher
automotive revenues, up 10 percent for the quarter and 11 percent
for the first six months.  Automotive revenues were lower than
expected, however, mostly due to industrywide equipment shortages
and the General Motors strike, which began in June.  Automotive
traffic is expected to increase in the last half of the year as the
industry's service issues are resolved and mixing center activity
increases.  Paper/clay/forest revenues increased 3 percent for both
the quarter and the first six months, primarily due to increased
demand for paper.  Metals and construction revenues increased
3 percent for both the quarter and the first six months, due to
increased steel demand, mitigated by decreased aluminum, scrap and
aggregates shipments.  Agriculture/ government/consumer revenues
were unchanged in the quarter, but were down 3 percent for the first
six months.  Increased world production and decreased demand because
of the state of the Asian economy contributed to depressed prices
and reduced shipments.  Chemicals revenues decreased 3 percent for
the quarter and 2 percent for the first six months, mostly due to

PAGE 18

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

lower chloral-alkali, sulfur and miscellaneous chemicals shipments.
Some chemicals traffic has been diverted to trucks and barges due to
rail service problems in the West, resulting in less received
traffic, which customarily represents about half of NS' chemicals
revenue.

General merchandise traffic is expected to post moderate gains for
the remainder of the year, supported by growing mixing center
traffic and continued progress in resolving equipment shortages and
in overcoming Western rail service problems.

Intermodal
- ----------
Second-quarter intermodal revenues were 4 percent above last year
and 7 percent higher for the first six months, due to increased
container and RoadRailer (RT) revenues that more than offset
decreased trailer revenues.  In the second quarter, a decline in
rail domestic container traffic, resulting from increased truck
competition driven by truckload over-capacity and lower fuel prices,
offset much of an increase in international container traffic.  The
international container market appears to have crested as retailers
are purchasing goods ahead of the normal peak period to take
advantage of the economic situation in Asia.  International
steamship lines have been at eastbound capacity throughout the
second quarter.

Beginning in August, NS is implementing a redesign of its intermodal
services in anticipation of the closing of the Conrail transaction
(see "Joint Acquisition of Conrail," below and Note 3).  The first
phase of the initiative is expected to result in short-term volume
declines compared with last year's levels, as train services are
realigned.  During the second phase, commencing on the Closing Date,
the Conrail routes operated by NS will be added to the network.  In
the third phase, occurring 12-18 months after the Closing Date,
additional intermodal services will be initiated.  The redesign has
the objective of optimizing the intermodal network to position NS to
achieve the aggressive volume goals anticipated in the Conrail
transaction.

For the remainder of the year, intermodal revenues are expected to
be below last year's levels, due to the network redesign and an
expected continuation of the market forces experienced in the second
quarter.

Railway Operating Expenses
- --------------------------
Second-quarter railway operating expenses were 5 percent higher than
last year, and were 6 percent higher for the first six months.  The
increases were principally due to expenses related to higher
carloadings, up 2 percent for the quarter and 4 percent for the
first six months, increased compensation and benefits expenses, and
Conrail integration costs.

PAGE 19

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

The largest increases were in "Materials, services and rents," up
17 percent in the second quarter and 15 percent for the first six
months.  The principal reasons for the increases were: (1) higher
equipment rents associated with the increase in automotive and
intermodal traffic and the absence this year of income from rental
of leased locomotives, (2) higher locomotive and freight car repair
costs resulting from older units remaining in service in
anticipation of increased traffic volumes that will result after the
closing of the Conrail transaction, and (3) other Conrail-related
integration expenses.

"Compensation and benefits" expense increased 4 percent in the
second quarter and 7 percent for the first six months.  Conrail
integration costs had the most significant impact on labor costs.
In anticipation of higher traffic volumes after the Closing Date, NS
began hiring and training additional train and engine employees in
mid-1997.  Also contributing to the increases were higher wage
rates, new FRA train inspection requirements which increased labor
expenses by more than $1 million per month, and a higher Railroad
Unemployment Tax rate.  For the quarter, these higher labor costs
were mitigated by reduced stock-based compensation costs, reflecting
the decline in NS' stock price that essentially reversed the
expenses associated with the first-quarter increase.  Both periods
benefited from lower pension expenses attributable to favorable
investment returns on pension plan assets.

"Other" expenses increased 15 percent in the second quarter and
14 percent for the first six months, primarily due to the effects of
favorable adjustments last year for property taxes.

"Diesel fuel" expenses decreased 18 percent in the second quarter
and were 21 percent lower for the first six months, due to the
effect of a lower price per gallon, partially offset by higher
consumption resulting from increased traffic.

The 1 percent increase in railway operating revenues, coupled with
the 5 percent increase in railway operating expenses, produced a
railway operating ratio of 72.8 percent in the second quarter,
compared with 70.0 percent last year.  Excluding Conrail-related
items and the impact of lower stock-based compensation expenses, the
ratio would have been 72.1 percent.  For the first six months, the
railway operating ratio was 74.6 percent, compared with 71.5 percent
last year.  Excluding Conrail-related items, the ratio would have
been 72.3 percent.  The railway operating ratio in 1998 has been
adversely affected by the change in traffic mix related to growth in
automotive and intermodal traffic, which includes some of NS' most

PAGE 20

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

time-sensitive and resource-intensive business.  This has resulted
in more trains, increased handling costs (such as loading and
unloading charges), and higher equipment rents.  Furthermore, the
change in the coal traffic mix contributed to the increases in the
railway operating ratio.

Equity in Earnings of Conrail
- -----------------------------
Conrail's second-quarter net income was $115 million.  NS' portion,
or 58 percent, of Conrail's net income, net of $17 million of
amortization of the difference between NS' investment in Conrail and
the underlying equity in net assets, was $50 million.  For the first
six months, Conrail's net income was $200 million, and NS' portion,
net of amortization, was $82 million.  The second quarter and first
six months of 1997 reflected NS' 58 percent economic interest in
Conrail beginning May 23 and its less than 10 percent ownership of
Conrail stock from February 10 until May 23, 1997.

Other Income - Net
- ------------------
"Other income - net" was $16 million higher in the second quarter,
and was $20 million higher for the first six months, compared with
the same periods last year.  Both increases were primarily due to
higher gains on dispositions of property and investments and a
favorable adjustment of interest accruals on possible federal income
tax liabilities resulting from the settlement of the 1993 and 1994
tax-year audits.

Interest Expense on Debt
- ------------------------
"Interest expense on debt" increased significantly for the second
quarter and first six months, compared with last year, a result of
interest on the $5.8 billion of debt issued during the first six
months of 1997 to finance NS' portion of the cost of the Conrail
acquisition.

Income Taxes
- ------------
The effective income tax rate for the second quarter was
26.7 percent, compared with 33.8 percent for the second quarter of
1997.  For the first six months, the effective rate was 28.0 percent,
compared with 34.7 percent last year.  Excluding NS' equity in
Conrail's earnings from pretax income for both periods, the effective
rate in the second quarter of 1998 was 33.2 percent, compared with
36.8 percent last year, and for the first six months was 34.3 percent
in 1998, compared with 36.4 percent last year.  The lower effective
rates for both periods resulted from favorable adjustments to income
tax expenses upon settlement of the 1993 and 1994 federal income tax
audits.

PAGE 21

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

Discontinued Operations
- -----------------------
"Income from discontinued operations" for the first six months of
1998 included the $98 million after-tax gain from the sale of NAVL
that was consummated on March 28 (see Note 4).  Prior to the sale,
motor carrier operations in 1998 produced a $1 million loss; in
1997, these operations produced income of $4 million in the second
quarter and $7 million for the first six months.

FINANCIAL CONDITION AND LIQUIDITY

June 30, 1998  December 31, 1997
-------------  -----------------
($ in millions)

Cash and short-term investments         $ 185            $159
Working capital                         $ (38)           $ 10
Current assets to current liabilities     1.0             1.0
Debt to total capitalization             56.9%           57.9%

CASH PROVIDED BY OPERATING ACTIVITIES is NS' principal source of
liquidity and was sufficient to cover the majority of the cash
outflows for dividends, debt repayments, and capital spending (see
Consolidated Statements of Cash Flows on page 6).  The cash source
arising from the change in "Accounts receivable" for the first six
months of 1998, compared with cash use for the same period in 1997,
was principally the result of a decrease in rail freight receivables
this year, compared with an increase last year.  The decrease in the
cash source arising from the change in "Current liabilities other
than debt" was primarily due to interest payments related to the
term notes issued in May 1997 to finance a portion of NS' share of
the Conrail acquisition.  The small working capital deficit at June
30, 1998, was attributable to accrued interest on those notes, which
is due in the fourth quarter.  NS expects to issue additional
commercial paper to fund some of those interest payments.

CASH USED FOR INVESTING ACTIVITIES for the first six months of 1998
reflected the $200 million of proceeds in the first quarter from the
sale of NAVL (see Note 4).  The "Investment in Conrail" for the
first six months of 1998 included payments for previously untendered
Conrail shares and direct costs relating to the acquisition.

PAGE 22

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

NS' commitment in prior years to a large capital spending program
should position it well to integrate Conrail operations into its
system.  Additional capital spending in the early years following
the Closing Date will be necessary to achieve a safe and efficient
integration.  For instance, new connections are required to
integrate NS and Conrail routes; new terminals, improvements to
existing terminals, new sidings, and improvements to existing
Conrail routes are required to handle anticipated increases in
traffic.  NS expects to make whatever investments in plant,
equipment and facilities prove necessary.  Following the Control
Date, NS' ability to assess the integrated system's needs will be
enhanced, with the result that the timing and amount of expenditures
may differ from earlier estimates.

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES in the first six
months of 1997 included proceeds from the sale of commercial paper
to finance NS' portion of the acquisition of Conrail.  "Debt
repayments" included reductions in outstanding commercial paper of
$109 million in 1998 and $175 million in 1997.

JOINT ACQUISITION OF CONRAIL

On July 23, 1998, the STB approved, with certain conditions, the
NS/CSX joint application for control of Conrail Inc. (Conrail), which
is expected to become effective August 22, 1998 (see Note 3).  In
connection with ultimate implementation of these STB-approved
transactions, Conrail commenced on August 4 soliciting consents for
amendments to and waivers of various provisions of the indentures and
of the leases relating to certain of Conrail's outstanding
obligations.

Closing is expected to occur by the end of this year or in the first
quarter of 1999.  The Closing Date marks the point at which Norfolk
Southern Railway actually can begin to operate certain of the assets
and routes of Conrail, thereby permitting NS to begin to realize many
of the anticipated benefits of this transaction.

The Closing Date and realization of these benefits are dependent upon,
among other things: (1) the successful integration of NS' portion of
Conrail's system into its railroad system, and (2) successful
coordination of operations within the Shared Assets Areas.  NS is
working diligently to minimize service disruptions and smoothly
integrate its portion of Conrail's system into its own.  A failure by
NS or CSX to successfully integrate their respective portions of
Conrail, including information technology systems, could have a
substantial impact on NS' financial position, results of operations,
or liquidity.

PAGE 23

Item 2.   Management's Discussion and Analysis of Financial Condition
- ------    -----------------------------------------------------------
and Results of Operations. (continued)
-------------------------

YEAR 2000 COMPLIANCE

In October of 1995, NS initiated a project to review and modify, as
necessary, its computer applications and hardware and other equipment
for Year-2000 compliance.  NS expects to have all its systems and
equipment assessed, remedied and tested by mid-1999.  In addition, NS
has initiated formal communications with institutions involved in its
business, including other railroads, significant suppliers, large
customers and financial institutions to determine the extent to which
NS may be vulnerable to third parties' failures to remedy their own
potential Year-2000 problems.

NS has allocated existing information technology resources and has
incurred incremental costs, mostly for contract programmers and
consultants, in connection with its Year-2000 compliance effort.
Incremental costs through June 30, 1998, which were expensed, were
less than $10 million, and total incremental costs are expected to be
less than $25 million.  Failure to achieve Year-2000 compliance--by
NS, other railroads, its suppliers, and its customers--could
negatively affect NS' ability to conduct business for an extended
period.  Management believes that NS will be successful in its Year-
2000 conversion; however, there can be no assurance that other
companies on which NS' systems and operations rely will be converted
on a timely basis, and such failure could have a material effect on
NS' financial position, results of operations, or liquidity.

NEW ACCOUNTING PRONOUNCEMENT

During the second quarter of 1998, Statement of Financial Accounting
Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments
and Hedging Activities," was issued.  SFAS 133, which NS expects to
adopt in the first quarter of 2000, requires that an entity recognize
all derivatives as either assets or liabilities and measure those
instruments at fair value.  In addition, SFAS 133 establishes
accounting standards for hedging activities.  Adoption of SFAS 133 is
not expected to have a material effect on NS' financial position,
results of operations, or liquidity.

PAGE 24

PART II.  OTHER INFORMATION
----------------------------
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

Item 4. Submission of Matters to a Vote of Security Holders
- ------  ---------------------------------------------------
Registrant's annual meeting of stockholders was held on May 14,
1998, at which meeting three directors were elected to the class whose
term will expire in 2001, one director was elected to the class whose
term will expire in 1999, and the appointment of independent public
accountants was ratified.

The four nominees for directors, who were uncontested, were
elected by the following vote:

THREE-YEAR TERM
--------------------------------------------------------------------
FOR              AUTHORITY WITHHELD
---              ------------------

L. E. Coleman            324,372,128 votes        4,121,047 votes
Landon Hilliard          324,543,779 votes        3,949,396 votes
Jane Margaret O'Brien    324,257,564 votes        4,235,611 votes

ONE-YEAR TERM
--------------------------------------------------------------------
FOR              AUTHORITY WITHHELD
---              ------------------

T. Marshall Hahn, Jr.    324,205,244 votes        4,287,931 votes

The appointment of KPMG Peat Marwick, LLP, independent public
accountants, was ratified by the following vote:

FOR:  326,458,570 shares              AGAINST:  1,138,121 shares

ABSTAINED:  896,484 shares

Item 6. Exhibits and Reports on Form 8-K.
- ------  --------------------------------

(a)  Exhibits:

Financial Data Schedule

(b)  Reports on Form 8-K:

None

PAGE 25

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.

NORFOLK SOUTHERN CORPORATION
-----------------------------------------
(Registrant)

Date:   August 11, 1998        /s/ Dezora M. Martin
-------------------      -----------------------------------------
Dezora M. Martin
Corporate Secretary (Signature)

Date:   August 11, 1998        /s/ John P. Rathbone
-------------------      -----------------------------------------
John P. Rathbone
Vice President and Controller
(Principal Accounting Officer) (Signature)

PAGE 26

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

INDEX TO EXHIBITS
-----------------

Electronic
Submission
Exhibit
Number                     Description                     Page Number
- -----------  -----------------------------------------     -----------

27        Financial Data Schedule                            27
(This exhibit is required to be
submitted electronically pursuant to the
rules and regulations of the Securities
and Exchange Commission and shall not be
deemed filed for purposes of Section 11
of the Securities Act of 1933 or
Section 18 of the Securities Exchange
Act of 1934).

<ARTICLE>      5
<MULTIPLIER>   1,000,000

<PERIOD-TYPE>                 6-MOS       6-MOS           3-MOS
<FISCAL-YEAR-END>             DEC-31-1998 DEC-31-1997     DEC-31-1997
<PERIOD-END>                  JUN-30-1998 JUN-30-1997 <F1>  MAR-30-1997 <F1>
<CASH>                        $    86     $     94        $    136
<SECURITIES>                       99          183             186
<RECEIVABLES>                     539          606             607
<ALLOWANCES>                        4            4               4
<INVENTORY>                        61           63              63
<CURRENT-ASSETS>                  977        1,228           1,281
<PP                         14,727       14,082          13,913
<DEPRECIATION>                  4,485        4,331           4,292
<TOTAL-ASSETS>                 17,746       17,184          12,239
<CURRENT-LIABILITIES>           1,015        1,152           1,003
<BONDS>                         7,539        7,493           2,844
<PREFERRED-MANDATORY>               0            0               0
<PREFERRED>                         0            0               0
<COMMON>                          401          133             133
<OTHER-SE>                      5,359        5,047           4,912
<TOTAL-LIABILITY-AND-EQUITY>   17,746       17,184          12,239
<SALES>                             0            0               0
<TOTAL-REVENUES>                2,145        2,113           1,046
<CGS>                               0            0               0
<TOTAL-COSTS>                   1,601        1,511             765
<OTHER-EXPENSES>                 (154)           2              48
<LOSS-PROVISION>                    0            0               0
<INTEREST-EXPENSE>                255          124              38
<INCOME-PRETAX>                   443          476             195
<INCOME-TAX>                      124          165              70
<INCOME-CONTINUING>               319          311             125
<DISCONTINUED>                     97            7               3
<EXTRAORDINARY>                     0            0               0
<CHANGES>                           0            0               0
<NET-INCOME>                      416          318             128
<EPS-PRIMARY>                    1.10         0.85            0.34
<EPS-DILUTED>                    1.09         0.84            0.34

<FN>
<F1> Financial data schedules for 1997 are restated to reflect 
discontinued operations and the effect of adoption of Statement of 
Financial Accounting Standards No. 128, "Earnings per Share."