[On Ernst & Young LLP Letterhead]

                             Exhibit 18-1


August 17, 1994


Mr. Dave Gwinn
Chief Financial Officer
Todd Shipyards Corporation
1801-16th Avenue Southwest
P.O. Box 3806
Seattle, Washington  98134

Dear Mr. Gwinn:

Note  2 of the Notes to the Consolidated financial  statements of Todd
Shipyards  Corporation included in its Form 10-Q for the  three  month
period  ended  July  3,  1994 describes a  change  in  the  method  of
accounting  for  certain general and administrative  costs  associated
with  long term contracts.  Under the old method, the Company included
general  and  administrative costs as contract costs.  Under  the  new
method,  adopted in the first quarter of fiscal year 1995, the Company
records  general  and  administrative costs  as  incurred.   You  have
advised  us that you believe the change is to a preferable  method  in
your   circumstances  based  on  the  Company's  change  in   business
conditions and emphasis.  Historically, the majority of the  Company's
revenue  has  come from contracts with the Department of  Defense  and
other  shipbuilding  and  major  overhaul  projects.   Currently,  the
majority of the Company's business is from commercial enterprises  and
projects  of shorter duration.  Such a change in emphasis and  mix  is
not  expected  to  reverse.  Although the Company's business  mix  has
changed,  the  Company continues to bid on Department of  Defense  and
shipbuilding projects.

There  are  no  specific  authoritative  criteria  for  determining  a
"preferable"  method of accounting for the general and  administrative
costs  associated  with long term contracts based  on  the  particular
circumstances; however, we conclude that the change in the  method  of
accounting for general and administrative costs associated  with  long
term contracts is to an acceptable alternative method which, based  on
your  business  judgment to make this change  for  the  reasons  cited
above, is preferable in your circumstances.  We have not conducted  an
audit in accordance with generally accepted auditing standards of  any
financial  statements of the Company as of any date or for any  period
subsequent  to  April 3, 1994, and therefore we  do  not  express  any
opinion  on  any  financial statements of Todd  Shipyards  Corporation
subsequent to that date.

                              Very truly yours,



                              /s/ Ernst & Young LLP