EXHIBIT 12
Computation of Ratio of Earnings to Fixed Charges

Year ended December 31  (in millions)  1994     1993*   1992**   1991*** 1990
Fixed Charges:
   Interest expense                  $  732  $   755  $  845   $  818  $  855
   Rental expense                       190      201     213      211     196
    Total fixed charges before
     capitalized interest               922      956   1,058    1,029   1,051
   Capitalized interest                   2        5      17        3       -
    Total fixed charges              $  924  $   961  $1,075   $1,032  $1,051
Earnings available for fixed 
  charges:
   Earnings****                      $1,602  $  (227)  $ 171   $  963  $1,103
   Less undistributed income in
    minority owned companies            (54)     (51)    (52)     (70)    (60)
   Add fixed charges before
    capitalized interest                922      956   1,058    1,029   1,051
   Total earnings available for 
    fixed charges                    $2,470  $   678 $ 1,177   $1,922  $2,094
Ratio of earnings to
 fixed charges (1)(2)                  2.67     0.71    1.09     1.86    1.99

(1)   The ratio of earnings to fixed charges has been computed based on the 
      Company's continuing operations by dividing total earnings available
      for fixed charges, excluding capitalized interest, by total fixed 
      charges.  Fixed charges consist of interest, including capitalized 
      interest, and one-third of rent expense as representative of the
      interest portion of rentals.  Interest expense has been assigned to
      discontinued operations principally on the basis of the relative amount
      of gross assets of the discontinued operations.  Management believes
      that this allocation method is reasonable in light of the debt
      specifically assigned to discontinued operations.  The discontinued
      operations consist of the Company's real estate development and related
      financing operations and its third-party financing and leasing
      businesses, and Other Financial Services businesses.
(2)   The Company's ratio of earnings to fixed charges includes the effect 
      of the Company's finance subsidiaries, which primarily finance Xerox 
      equipment.  Financing businesses, due to their nature, traditionally 
      operate at lower earnings to fixed charges ratio levels than do non-
      financial companies.
*     In 1993, the ratio of earnings to fixed charges includes the effect of
      the $1,373 million before-tax ($813 million after-tax) charge incurred
      in connection with the restructuring provision and litigation
      settlements.  Excluding this charge, the ratio was 2.13.  1993 earnings
      were inadequate to cover fixed charges.  The coverage deficiency was
      $283 million.
**    In 1992, the ratio of earnings to fixed charges includes the effect of
      the $936 million before-tax ($778 million after-tax) charge incurred in 
      connection with the decision to disengage from the Company's Insurance
      and Other Financial Services businesses.  Excluding this charge, the
      ratio was 2.05.
***   In 1991, the ratio of earnings to fixed charges includes the effect of 
      the $175 million before-tax charge incurred in connection with the 
      Document Processing work-force reduction.  Excluding this charge, the
      ratio was 2.08.
****  Sum of income before income taxes and income in minority owned
      companies.