Exhibit 12                     Xerox Corporation
                  Computation of Ratio of Earnings to Fixed Charges

                      Six months ended               Year ended
                           June 30,                  December 31,
(In millions)            1998*    1997    1997   1996    1995    1994    1993**
Fixed charges:
  Interest expense     $  334   $  288  $  617 $  592  $  603  $  520  $  540
  Rental expense           69       60     140    140     142     170     180
Total fixed charges
  before capitalized
  interest and preferred
  stock dividends of
  subsidiaries            403      348     757    732     745     690     720
Preferred stock divi-
   dends of subsidiaries   27       23      50      -       -       -       -
Capitalized interest        -        -       -      -       -       2       5
   Total fixed charges $  430   $  371  $  807 $  732  $  745  $  692  $  725
Earnings available for
  fixed charges:
  Earnings***          $ (628)  $  993  $2,268 $2,067  $1,980  $1,602  $ (193)
  Less undistributed
    income in minority
    owned companies       (21)     (65)    (84)   (84)    (90)    (54)    (51)
  Add fixed charges before
    capitalized interest
    and preferred stock
    dividends of 
    subsidiaries          403      348     757    732     745     690     720
  Total earnings
    available for
    fixed charges      $ (246)  $1,276  $2,941 $2,715  $2,635  $2,238  $  476
Ratio of earnings to
   fixed charges (1)(2)     *     3.44    3.64   3.71    3.54    3.23    0.66

(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 and preferred stock
    dividends of subsidiaries, by total fixed charges.  Fixed charges consist
    of interest, including capitalized interest and preferred stock dividends
    of subsidiaries, and one-third of rent expense as representative of the
    interest portion of rentals.  Debt has been assigned to discontinued
    operations based on historical levels assigned to the businesses when
    they were continuing operations, adjusted for subsequent paydowns.
    Discontinued operations consist of the Company's Insurance, Other
    Financial Services, and Third Party Financing and Real Estate 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 are more highly leveraged and,
    therefore, tend to operate at lower earnings to fixed charges ratio 
    levels than do non-financial businesses.

*   Earnings for the six months of 1998 were inadequate to cover fixed charges.
    The coverage deficiency was $676 million.  Excluding the restructuring
    charge, the ratio of earnings to fixed charges would be 3.25.

**  1993 earnings were inadequate to cover fixed charges.  The coverage 
    deficiency was $249 million.

*** Sum of "Income (Loss) before Income Taxes (Benefits), Equity Income and
    Minorities' Interests" and "Equity in Net Income of Unconsolidated
    Affiliates."
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