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                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549


                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported)    June 28, 1996


                               SALEM CORPORATION
             (Exact name of registrant as specified in its charter)


Commonwealth of Pennsylvania           1-3931                   25-0923435
(State or other jurisdiction        (Commission               (IRS Employer
     of incorporation)              File Number)            Identification No.)


             P.O. Box 2222, Pittsburgh, Pennsylvania            15230
            (Address of principal executive offices)          (Zip Code)


      Registrant's telephone number, including area code   (412) 923-2200


                                      N/A
.................................................................................
         (Former name or former address, if changed since last report.)
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ITEM 5.  OTHER EVENTS.

  On June 28, 1996, Salem Corporation (the "Company") announced that the
Company, Salem Group, Inc., a Delaware corporation (the "Parent"), and SC
Acquisition Corporation, a Pennsylvania corporation and wholly-owned subsidiary
of the Parent (the "Subsidiary"), entered into a definitive Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Subsidiary
with and into the Company with the Company as the surviving corporation.
Following the approval and adoption of the Merger Agreement by the affirmative
vote of a majority of the votes cast by all holders of the Company's
outstanding shares of common stock, par value $.50 per share (the "Shares"),
and satisfaction or waiver of all other conditions precedent, the Subsidiary
will merge with the Company and each Share, other than Shares held by the
Parent or the Subsidiary, will be converted automatically into the right to
receive $25.00 in cash per Share.

  For additional information concerning the foregoing, reference is made to the
Company's press release issued June 28, 1996 and the Merger Agreement, copies
of which are attached as exhibits to this Current Report.


ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.



  EXHIBIT
  NUMBER                  DESCRIPTION
  ------                  -----------
                       
    2.1                   Agreement and Plan of Merger, dated as of June 28, 
                          1996, among Salem Corporation, Salem Group, Inc. 
                          and SC Acquisition Corporation

   20.1                   Press Release issued June 28, 1996



         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.

                                        SALEM CORPORATION
                                        (Registrant)


                                        By  /s/ A.A. FORNATARO
                                           -------------------------------------
                                           A.A. Fornataro
                                           President and Chief Operating Officer
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                               INDEX TO EXHIBITS




  EXHIBIT
  NUMBER                                      DESCRIPTION
  ------                                      -----------
                       
    2.1                   Agreement and Plan of Merger, dated as of June 28, 
                          1996, among Salem Corporation, Salem Group, Inc. and
                          SC Acquisition Corporation

   20.1                   Press Release issued June 28, 1996