FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
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OR
( ) 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 1-1657
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CRANE CO.
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(Exact name of registrant as specified in its charter)

Delaware 13-1952290
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)

100 First Stamford Place, Stamford, CT 06902
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (203) 363-7300
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Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
----------------------- ------------------------
Common Stock, par value $1.00 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
7 1/4% senior notes due June, 1999
8 1/2% senior notes due March, 2004
6 3/4% senior notes due October, 2006
(Title of Class)

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. Yes X No ______
-----

Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (x )

Based on the average stock price of $27.53 on January 29, 1999 the aggregate
market value of the voting stock held by nonaffiliates of the registrant was
$1,540,307,167.

The number of shares outstanding of the registrant's common stock, $1.00 par
value was 68,452,529 at January 29, 1999.

DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------

Portions of the annual report to shareholders for the year ended December 31,
1998 and portions of the proxy statement for the annual shareholders meeting to
be held on April 5, 1999 are incorporated by reference into Parts I, II, III and
IV of this Form 10-K Annual Report.

PART I
Item 1. Business
--------

Crane Co. ("Crane" or the "Company") is a diversified manufacturer of
engineered industrial products and the largest American distributor of doors,
windows and millwork. Founded in 1855, Crane employs over 12,500 people in North
America, Europe, Asia and Australia.

STRATEGY

The company's strategy is to grow the earnings of niche businesses with
high market share, build an aggressive and committed management team whose
interests are directly aligned to those of the shareholders, and maintain a
focused, efficient corporate structure.

ACQUISITIONS

In the past five years, the company has completed 19 acquisitions. During
1998 the company completed six acquisitions at a total cost of $224 million. In
May, the company acquired Environmental Products USA, Inc. This business
manufactures membrane-based water treatment systems for industrial, commercial
and institutional markets. Also in May, the company acquired Number One Supply,
a building products distribution business based in Baltimore, MD and Raleigh,
NC. In July, the company acquired Consolidated Lumber Company, a wholesale
distributor of lumber and millwork products in the greater Kansas City, MO area.
Number One Supply and Consolidated Lumber were integrated into the company's
Huttig Sash & Door Company ("Huttig") subsidiary. In August, the company
acquired Sequentia Holdings, Inc., a manufacturer of fiberglass-reinforced
plastic panels for the construction and building products markets. Sequentia
complements the company's Kemlite subsidiary, which provides fiberglass-
reinforced plastic panels for the transportation and recreational vehicle
markets. In September, the company acquired Liberty Technologies, Inc. which
develops, manufactures, markets and sells valve, motor, engine and compressor
condition monitoring products and related services to the nuclear power
generation and industrial process markets worldwide. Liberty complements the
company's nuclear valve business which provides valves, valve diagnostic
equipment and related services to the nuclear power industry, and its Dynalco
Controls business, which provides sensors, instrumentation, control products and
automation systems for use in industrial engine applications. Also in
September, the company acquired the Plastic-Lined Piping Products ("PLPP")
division of The Dow Chemical Company. PLPP was integrated with the company's
Resistoflex division, which supplies lined pipe and valves to the chemical
process and industrial markets.

During 1997, the company completed five acquisitions at a total cost of $82
million, including assumed debt. In March, the company acquired the
transportation products business of Sequentia, Incorporated. This business,
which produces fiberglass-reinforced plastic panels for the truck body, trailer
and container market, has been integrated with the company's Kemlite subsidiary.
Also in March, the company acquired Polyvend Inc., a manufacturer of snack and
food vending machines. Polyvend was completely integrated into Crane's National
Vendors division significantly expanding its sales distribution channels. In
April, the company acquired the Nuclear Valve Business of ITI MOVATS from
Westinghouse. MOVATS is a leading supplier of valve diagnostic equipment and
valve services to the commercial nuclear power industry. In July, through its
Huttig subsidiary, the company acquired MALLCO Lumber & Building Materials Inc.,
a leading wholesale distributor of lumber, doors and engineered wood products
serving Arizona and the surrounding region. In December the company acquired
certain operations and product lines of Stockham Valves & Fittings, Inc. The
acquired product lines and related manufacturing operations have been integrated
into the company's engineered valve business and its commercial bronze and iron
valve business.

PART I
Item 1. Business (continued)
--------

During 1996, the company acquired two companies. In mid-October, the
company acquired Interpoint Corporation in a tax-free merger in which the
company issued 1,094,312 shares of Crane common stock and assumed $26 million
in debt. Interpoint is a leader in the design and manufacture of standard and
custom miniature DC-to-DC power converters with applications in aerospace and
medical technology industries. In late October the company acquired Grenson
Electronics Ltd. of Daventry, England. Grenson Electronics produces low voltage
power conversion electronics for aerospace, defense and industrial markets.

During 1995, the company completed three acquisitions at a total cost of
$9.4 million. In February the company, through its Barksdale Control Products
GmbH subsidiary, acquired Unimess GmbH, a German-based manufacturer of solid
state pressure switches and transducers, level switches and indicating systems,
and flow measurement and control components for specialized instrumentation. In
the fourth quarter, the company, through its Crane Pumps & Systems subsidiary,
acquired Process Systems, Inc. based in Michigan. Process Systems is a
manufacturer of vertical turbine pumps and accessories for industrial
applications. In November 1995, the company acquired Kessel PTE Ltd., a
fluoropolymer plastic lined pipe manufacturer with facilities in Singapore and
Thailand.

The company completed three acquisitions in 1994 at a total cost of $240
million. The company, through its Huttig subsidiary, acquired a molding and
millwork manufacturing operation in Prineville, Oregon in May 1994. In April,
1994, the company purchased Mark Controls Corporation, a manufacturer of
automatic and manually operated valves, and specialized instruments and
controls, for commercial and industrial customers. The company acquired ELDEC
Corporation in March 1994. ELDEC's products are used worldwide on all major
commercial and business aircraft and include: position indication and control
systems, proximity switches and components, true mass fuel flowmeters, and power
conversion components and systems.

DIVESTITURES

In the past five years, the company has divested six businesses. In 1998,
the company sold two foundry operations acquired as part of the Stockham Valves
and Fittings Inc. transaction. Accu-Cast, Inc. in Chattanooga, TN and the
Aliceville Foundry in Aliceville, AL were sold for a total of $4.3 million. In
1997, the company sold its Valve Systems and Controls division for $7.5 million
in cash and $1.5 million in preferred stock. In March of 1996, the company
sold Empire Foundry. In December 1994, Huttig sold its window manufacturing
business for $2.4 million. The transaction excluded real estate and receivables.
In July 1994, the company sold Modulinc, the fiber optic channel product line of
ELDEC.

LONG-TERM FINANCING

In September 1998 the company sold $100,000,000 of 6 3/4% notes that will
mature on October 1, 2006. During June 1994 the company sold $150,000,000 of 7
1/4% notes that will mature on June 15, 1999. During April 1992 the company
sold $100,000,000 8 1/2% notes that will mature on March 15, 2004.

BUSINESS SEGMENTS

See pages 20 and 21 of the Annual Report to Shareholders for year ended
December 31, 1998 for sales, operating profit and assets employed of each
business segment.

PART I

Item 1. Business (continued)
--------

FLUID HANDLING

The Fluid Handling segment consists of valve, pump and water treatment
businesses. The Crane Valve business with seven manufacturing facilities in
North America, as well as operations in the United Kingdom, Australia, Norway,
China and Indonesia, sells a wide variety of commodity and special purpose
valves and fluid control products for the chemical and hydrocarbon processing,
power generation, marine, general industrial and commercial construction
industries. Products are sold under the Crane, Jenkins, Pacific, Westad,
Flowseal, Center Line, Stockham, Triangle and Duo-Check brands. The 1998
acquisition of Liberty Technologies, Inc. which manufactures condition
monitoring products and related services to the nuclear power generation market
worldwide complements the company's nuclear valve business which provides
valves, valve diagnostic equipment and related services to the nuclear power
industry. Crane Pumps has eight manufacturing facilities in the United States.
Pumps are manufactured under the Deming, Weinman, Chempump, Burks, Chem/Meter,
Barnes, Sellers and Process Systems brand names. Pumps are sold to a broad
customer base, which includes chemical and hydrocarbon process industries,
automotive, municipal, industrial and commercial wastewater, power generation,
commercial heating, ventilation and air-conditioning industries and original
equipment manufacturers. The water treatment business has manufacturing
facilities in Pennsylvania and Florida and serves the water and wastewater
treatment market. Its products are sold under the Cochrane and Environmental
Products names.

This group employs over 3,400 people and had assets of $355.5 million at
December 31, 1998. Fluid Handling order backlog totaled $79.3 million.

Products in this group are sold directly to end users through Crane's sales
organization and through independent distributors and manufacturers
representatives.

AEROSPACE

The Aerospace segment consists of ELDEC, Hydro-Aire, Lear Romec and
Interpoint.

The group employs 2,500 people and had assets of $296.7 million at year-
end. The order backlog totaled $281.2 million at December 31, 1998.

ELDEC designs, manufactures and markets custom position indication and
control systems, proximity sensors, pressure sensors, true mass fuel flowmeters
and power conversion systems for the commercial, business and military aerospace
industries, and military marine and telecommunications markets. These products
are custom designed for specific aircraft to meet technically demanding
requirements of the aerospace and telecommunication industry. ELDEC has two
international facilities one in England and one in France.

ELDEC also has a 47% equity investment in Powec A/S, a Norwegian
manufacturer of power conditioning products and systems for the commercial
wireless telecommunications market, whose products are complementary to the
products and complex power systems engineering capabilities at ELDEC.

PART I (continued)
Item 1. Business (continued)
--------

Hydro-Aire designs, manufactures and sells aircraft brake control and anti-
skid systems, including electro-hydraulic servo valves and manifolds, embedded
software and rugged electronic controls, hydraulic control valves, landing gear
sensors and fuel pumps as original equipment for the commercial transport,
business and commuter, military, government and general aviation aerospace
markets. In addition, Hydro-Aire designs and manufactures systems similar to
those above for the retrofit of aircraft with improved systems and manufactures
replacement parts for systems installed as original equipment by the aircraft
manufacturer. All of these products are largely proprietary to Hydro-Aire and,
to some extent, are custom designed to the requirements and specifications of
the aircraft manufacturer or program contractor. These systems and replacement
parts are sold directly to airlines, governments, and aircraft maintenance and
overhaul companies.

Lear Romec designs, manufactures and sells lubrication and fuel pumps for
aircraft, aircraft engines and radar cooling systems for the commercial and
military aerospace industries. Lear Romec has a leading share of the non-
captive market for turbine engine lube and scavenge oil pumps. Lear Romec also
manufactures fuel boost and transfer pumps for commuter and business aircraft.

Interpoint designs, manufactures and sells standard and custom miniature
(hybrid) DC-to-DC power converters and custom miniature (hybrid) electronic
circuits for applications in commercial, space and military aerospace industries
and in the medical technology industry.

ENGINEERED MATERIALS

The Engineered Materials segment consists of five businesses: Kemlite,
CorTec, Resistoflex, Polyflon and Crane Plumbing.

This group had assets of $263.6 million at December 31, 1998 and employed
1,600 people. Order backlog at year-end 1998 was $24.1 million.

Kemlite manufactures fiberglass-reinforced plastic panels for use
principally by the transportation industry in refrigeration and dry van truck
trailers and recreational vehicles. Kemlite products are also sold to the
commercial construction industry for food processing, fast food restaurant and
supermarket applications, to institutions where fire rated materials with low
smoke generation and minimum toxicity are required and to residential
construction. Kemlite sells its products directly to the truck trailer and
recreational vehicle manufacturers. Sequentia manufacturers fiberglass-
reinforced plastic panels for the construction and building products markets.
Kemlite uses distributors to serve its commercial construction market and some
segments of the recreational vehicle market. Sequentia's Grand Junction,
Tennessee and Houston, Texas plants were added to Kemlite's plants in Joliet,
Illinois and Jonesboro, Arkansas.

CorTec manufactures fiberglass-reinforced laminated panels serving the
truck and truck trailer segment of the transportation industry. CorTec markets
its products directly to the truck and truck trailer manufacturers.

PART I (continued)
Item 1. Business (continued)
--------

Resistoflex is engaged in the design, manufacture and sale of corrosion-
resistant, plastic-lined steel pipes, fittings, tanks, valves, expansion joints
and hose used primarily by the pharmaceutical, chemical processing, pulp and
paper, ultra pure water and waste management industries. It also manufactures
high-performance, separable fittings for operating pressures to 8,000 PSI used
primarily in the aerospace industry. Resistoflex sells its industrial products
through distributors who provide stocking and fabrication services to industrial
users in the United States. Its aerospace products are sold directly to the
aerospace industry. Resistoflex also manufactures plastic-lined pipe products
at its Singapore plant serving the Asian chemical processing and the Asian
pharmaceutical industries. In September 1998, the company acquired the Plastic-
Lined Piping Products ("PLPP") division of The Dow Chemical Company.
Manufacturing will continue at the acquired Bay City, Michigan plant.

Polyflon manufactures microwave laminates, high voltage RF capacitors,
radomes and circuit processing for the wireless communication, magnetic
resonance imaging, microwave and radar system manufacturers.

Crane Plumbing manufactures plumbing fixtures in Canada. Its products are
sold through distributors in Canada and it has a large share of the Canadian
plumbing fixtures market.

CRANE CONTROLS

This segment includes five businesses: Barksdale, Powers Process Controls,
Dynalco Controls, Azonix, and Ferguson. The companies in this segment design,
manufacture and market industrial and commercial products that control flows and
processes in various industries including the petroleum, chemical, construction,
food and beverage, power generation industries and transportation. Crane
Controls had assets of $127.7 million at December 31, 1998, and employs 900
people. On December 31, 1998, Crane Controls had a backlog of $28.3 million.

Barksdale manufactures solid state and electromechanical pressure switches
and transducers, level switches and continuous level indicators, temperature
switches, and directional control valves that serve a broad range of commercial
and industrial applications. It has manufacturing and marketing facilities in
the United States and Germany.

Powers Process Controls designs, manufactures and markets water mixing and
thermal shock protection shower systems, commercial and residential plumbing
brass, correctional water controllers, process controllers and instrumentation ,
process control valves and temperature regulators for industrial applications
and the commercial and institutional construction industry.

Dynalco Controls designs and manufactures rotational speed sensors,
temperature and pressure instruments and monitors for rugged environments,
microprocessor based engine and mechanism controls. Dynalco's products are used
worldwide by industries in a variety of applications, including stationary
natural gas engines, power generation, oil and gas production and transmissions,
and agriculture equipment.

Azonix manufactures operator interfaces and measurement and control systems
for hazardous and harsh applications, intelligent data acquisition products,
high-precision thermometers and calibrators for the oil and gas, petrochemical,
chemical, pharmaceutical and metal processing industries.

PART I (continued)

Item 1. Business (continued)
--------

CRANE CONTROLS (continued)

Ferguson designs and manufactures in the United States and through Ferguson
Machine Co. S.A. in Europe, precision index and transfer systems for use on and
with machines that perform automatic forming, assembly, metal cutting, testing
and inspection operations. Products include mechanical and electronic index
drives, pick-and-place robots, in line transfer machines, rotary tables, press
feeds and custom cams.

The products in this segment are sold directly to end users, and
engineering contractors through the company's own sales forces and cooperatively
with sales representatives, stocking specialists and industrial distributors.

MERCHANDISING SYSTEMS

The Merchandising Systems segment has two operating units: National
Vendors, the industry leader in the design and manufacture of a complete line of
vending merchandisers for the food/service vending market; and NRI, which
manufactures electronic coin validators in Buxtehude, Germany for the automated
merchandising and gambling/amusement markets in Europe. National Vendors
products include electronic vending merchandisers for refrigerated and frozen
foods, hot and cold beverages, snack foods, single cup individually brewed hot
drinks and combination vendors/merchandisers, designed to vend both snack foods
and hot/cold drinks, or snacks and refrigerated/frozen foods in one machine.
National Vendors manufactures its products in a 463,000 sq. ft. state of the art
facility in Bridgeton, Missouri. National Vendors' products are marketed to
customers in the United States and Europe by company sales and marketing
personnel as well as distributors, and in other international markets through
independent distributors. Merchandising Systems employs 1,150 people and had
assets of $117.9 million at year-end 1998.

Order backlog totaled $22.1 million at December 31, 1998.

WHOLESALE DISTRIBUTION

The company distributes millwork products through its wholly owned
subsidiary, Huttig Sash & Door Company ("Huttig"). These products include
doors, windows, moldings and related building products. Huttig assembles
certain of these products to customer specification prior to distribution. Its
principal customers are building material dealers, building contractors and home
remodelers that service the new construction and remodeling markets. Wholesale
operations are conducted nationally through forty-six distribution centers
throughout the United States, in both major and medium-sized cities. Huttig's
sales are made on both a direct shipment and out-of-warehouse basis entirely
through its own sales force.

Huttig also manufactures specialty molding and millwork products at its
Prineville, Oregon facility. The majority of the molding products are sold to
third parties but Huttig is the largest customer. In 1996, Huttig closed its
manufacturing plant in Montana, where it produced certain of the above products
and other finished lumber.

Crane Supply, a distributor of plumbing supplies, valves and piping in
Canada, maintains thirty-five branches throughout Canada and distributes Crane
manufactured products in that country. Crane Supply also distributes products
that are both complementary to and competitive with Crane's own manufactured
products.

Wholesale Distribution employs 2,800 people and had assets of $233.1
million at year end 1998.

PART I (continued)

Item 1. Business (continued)
--------

OTHER

The other segment consists of Crane Defense Systems, which is engaged in
the development and manufacture of specialized handling systems, elevators,
winches, ground support equipment, cranes and associated electronics. These
products are sold directly to the government, defense contractors and commercial
shipbuilders.

COMPETITIVE CONDITIONS

The company's lines of business are conducted under actively competitive
conditions in each of the geographic and product areas they serve. Because of
the diversity of the classes of products manufactured and sold, they do not
compete with the same companies in all geographic or product areas.
Accordingly, it is not possible to estimate the precise number of competitors or
to identify the principal methods of competition. Although reliable statistics
are not available, the company believes that it is an important supplier to a
number of market niches and geographic areas.

The company's products have primary application in the industrial,
construction, aerospace, automated merchandising, transportation, and fluid
handling industries. As such, they are dependent upon numerous unpredictable
factors, including changes in market demand, general economic conditions,
residential and commercial building starts, and capital spending. Because these
products are also sold in a wide variety of markets and applications, the
company does not believe it can reliably quantify or predict the possible
effects upon its business resulting from such changes.

Seasonality is a factor in Huttig and the Canadian operations.

The company's engineering and product development activities are directed
primarily toward improvement of existing products and adaptation of existing
products to particular customer requirements. While the company owns numerous
patents and licenses, none are of such importance that termination would
materially affect its business. Product development and engineering costs
totaled approximately $72,400,000 in 1998, $56,800,000 in 1997, and $52,000,000
in 1995. Included in these amounts were approximately $15,800,000, $9,500,000
and $10,300,000 received by the company in 1998, 1997 and 1996, respectively,
for customer sponsored research and development.

The company is not dependent on any single customer nor are there any
issues at this time regarding available raw materials for inventory.

Costs of compliance with federal, state and local laws and regulations
involving the discharge of materials into the environment or otherwise relating
to the protection of the environment are not expected to have a material effect
upon the company's capital expenditures, earnings or competitive position.

PART I (continued)

Item 1. Business (continued)
--------

Forward Looking Statements
--------------------------

Throughout the Annual Report to Shareholders, particularly in the Letter to
Shareholders and Management's Discussion and Analysis of Operations, the company
makes numerous statements about expectations of future performance and market
trends, and statements about plans and objectives and other matters, which
because they are not historical fact may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.

In addition, the company and its representatives may from time to time make
written or oral forward-looking statements, including statements contained in
the company's filings with the Securities and Exchange Commission and in its
reports to shareholders, which can be identified by the use of forward-looking
terminology such as "believes", "contemplates", "expects", "may", "will",
"could", "should", "would" or "anticipates" or the negative thereof or
comparable terminology.

All forward-looking statements speak only as of the date on which such
statements are made and involve risk and uncertainties that exist in the
company's operations and business environment and are not guarantees of future
performance. The company assumes no obligation to update any of these forward-
looking statements, whether as a result of new information or future events. As
a responsibility to our investors, the company will make reasonable efforts at
timely disclosure of future facts and circumstances which may affect such
statements.

Because the company wishes to take advantage of the "safe harbor" provision
of the Private Securities Litigation Reform Act of 1995, readers are cautioned
to consider the following important risk factors that could affect the company's
businesses and cause actual results to differ materially from those projected.

General

A substantial portion of the sales of the company's business segments are
concentrated in industries which are cyclical in nature. Because of the
cyclical nature of these businesses, their results are subject to fluctuations
in domestic and international economies, as well as to currency fluctuations and
unforeseen inflationary pressures. Reductions in the business levels of these
industries would impact negatively on the sales and profitability of the
affected business segments.

While the company is a principal competitor in most of its markets, all of
its markets are highly competitive. The company's competitors in many of its
business segments can be expected in the future to improve technologies, reduce
costs and develop and introduce new products, and the ability of the company's
business segments to achieve similar advances will be important to their
competitive positions. Competitive pressures, including those discussed above,
could cause one or more of the company's business segments to lose market share
or could result in significant price erosion, either of which would have an
adverse effect on the company's results of operations.

The company's acquisition program entails the potential risks inherent in
assessing the value, strengths, weaknesses, contingent or other liabilities and
potential profitability of acquisition candidates and in integrating the
operations of acquired companies. There can be no assurance that suitable
acquisition opportunities will be available in the future, that the company will
continue to acquire businesses or that any business acquired will be integrated
successfully or prove profitable.

PART I (continued)

Item 1. Business (continued)
--------

Forward Looking Statements (continued)
- ---------------------------

The company has substantial operations and sales outside the United States.
Such operations and transactions entail the risks associated with conducting
business internationally, including the risk of currency fluctuations, slower
payment of invoices, adverse trade regulations and possible social and economic
instability. While the full impact of this economic instability cannot be
predicted, it could have a material adverse effect on the company's revenues and
profitability.

Certain of the company's business segments are dependent upon highly
qualified personnel, and the company generally is dependent upon the continued
efforts of key management employees. Particularly in light of the current tight
labor market, the company's prospects would be adversely affected by an
inability to retain its key personnel.

New factors emerge from time to time, and it is not possible for management
to predict all of such factors. Further, management cannot assess the impact of
each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

Fluid Handling

Results for the Fluid Handling segment could be affected in the event of
unanticipated difficulties in assimilating newly acquired valve businesses into
existing operations. In addition, Crane's companies could face increased price
competition from larger competitors. Asia's economic turmoil could reduce sales
and profits, particularly if major projects for which Crane companies are
suppliers or bidders are cancelled or delayed, or if the companies' ability to
source product from international sources is impeded.

Aerospace

A significant fall-off in demand for air travel or a decline in airline
profitability generally could result in reduced aircraft orders, and could also
cause the airlines to scale back their purchases of repair parts from Crane
companies. The companies could also be impacted if major aircraft manufacturers
encountered production problems, or if pricing pressure from aircraft customers
caused the manufacturers to press their suppliers to lower prices. Sales and
profits could face erosion if pricing pressure from competitors increased, if
planned new products were delayed, if finding new aerospace-qualified suppliers
grew more difficult, or if required technical personnel became harder to hire
and retain. Aerospace segment results could be below expectations if Asia's
economic problems lead to a decline in aircraft orders, particularly since the
new, long-range Boeing aircraft favored for many Asian routes contain a higher
value of Crane-supplied equipment than other aircraft from Boeing and other
manufacturers.

Engineered Materials

In the Engineered Materials segment, sales and profits could fall if there
were a decline in demand for truck trailers, recreational vehicles or building
products, for which Crane companies produce fiberglass-reinforced panels.
Profits could be squeezed as well by unanticipated increases in resin and
fiberglass material costs, by unforeseen fluctuations in the Canadian dollar,
and by any inability on the part of Crane's companies to maintain their position
in product cost and functionality against competing materials.

PART I (continued)

Item 1. Business (continued)
--------

Forward Looking Statements (continued)
- ---------------------------

Merchandising Systems

Results at Crane's U.S.-based vending machine business could be reduced by
delays in launching or supplying new products or an inability to achieve new
product sales objectives. Results at Crane's Germany-based coin validation
machine business could be affected by changes in demand stemming from the advent
of the Euro, the planned new European currency, as well as by unforeseen
fluctuations in the value of the Deutschemark versus the U.S. dollar.

Controls

A number of factors could affect the Controls segment's results. Lower
sales and earnings could result if Crane's companies can not maintain their cost
competitiveness, encounter delays in introducing new products, or fail to
achieve their new product sales objectives. Results could decline because of an
unanticipated decline in demand for Crane products from the industrial
machinery, oil and gas, and heavy equipment industries, or from unforeseen
product obsolescence.

Wholesale Distribution

Sales in the Wholesale Distribution segment are significantly affected by
the strength of the domestic housing market, and a decline in housing starts
could have a negative impact on results. Decisions by some major suppliers to
change their distribution channels, bypassing Crane's wholesale distribution
network, could also diminish sales and profits. At Crane's Canadian wholesale
distribution operation, reported results in U.S. dollar terms could be eroded by
an unanticipated weakening of Canada's currency.

Impact of the Year 2000

The "Year 2000" issue concerns the potential exposures related to the
automated generation of business and financial misinformation resulting from the
application of computer programs which have been written using two digits,
rather than four, to define the applicable year of business transactions.
Suppliers, customers and creditors of the company also face Year 2000 issues. A
failure to successfully address the Year 2000 issue could have a material
adverse effect on the company's business or results of operations. The
discussion of the Impact of the Year 2000 contained on Pages 33 and 34 of the
company's 1998 Annual Report under Management's Discussion and Analysis of
Operations is incorporated herein by reference.

PART I (continued)

Item 2. Properties
----------
TOTAL MANUFACTURING FACILITIES NUMBER AREA
- ------------------------------ ------ ----
Fluid Handling
United States 17 1,431,000 sq. ft.
Canada 2 140,000 sq. ft.
International 10 1,261,000 sq. ft.

Aerospace
United States 6 653,000 sq. ft.
International 4 47,000 sq. ft.

Engineered Materials
United States 10 1,235,000 sq. ft.
Canada 3 601,000 sq. ft.
International 1 10,000 sq. ft.

Crane Controls
United States 7 412,000 sq. ft.
International 2 63,000 sq. ft.

Merchandising Systems
United States 1 463,000 sq. ft.
Other International 1 77,000 sq. ft.

Wholesale Distribution 1 577,000 sq. ft.

Other 1 113,000 sq. ft.

Leased Leases
Manufacturing Expiring
Facilities Number Area Through
------------- ------ ---- -------

United States 12 560,000 sq. ft. 2006
Canada 1 13,000 sq. ft. 2000
Other International 7 99,000 sq. ft. 2013

Other Facilities
----------------

Fluid Handling operates six valve service centers in the United States, of which
four are owned, and four distribution centers in the United States. This
segment operates internationally five distribution and three service centers.

Crane Controls operates one distribution center internationally.

Merchandising Systems operates eight distribution centers in the United States
and seven internationally.

Engineered Materials operates eight distribution centers in the United States,
of which one is owned, and three internationally. This segment operates three
service centers internationally.

Wholesale Distribution has forty-eight Huttig branch warehouses in the United
States, of which twenty-one are owned. The Canadian wholesale operation
maintains thirty-five distribution branch warehouses in Canada, of which twelve
are owned.

In the opinion of management, these properties have been well maintained, are in
sound operating condition, and contain all necessary equipment and facilities
for their intended purposes.

PART I (continued)

Item 3. Legal Proceedings

Neither the company, nor any subsidiary of the company has become a party
to, nor has any of their property become the subject of, any material legal
proceedings, other than ordinary routine litigation incidental to their
businesses.

The following proceedings are not considered by the company to be material
to its business or financial condition and are reported herein because of the
requirements of the Securities and Exchange Commission with respect to the
descriptions of administrative or judicial proceedings by governmental
authorities arising under federal, state or local provisions regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment.

On July 12, 1985 the company received written notice from the United States
Environmental Protection Agency (the "EPA") that the EPA believes the company
may be a potentially responsible party ("PRP") under the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980 ("CERCLA") to
pay for investigation and corrective measures which may be required to be taken
at the Roebling Steel Company site in Florence Township, Burlington County, New
Jersey (the "Site") of which its former subsidiary, CF&I Steel Corporation
("CF&I") was a past owner and operator prior to the enactment of CERCLA. The
stated ground for the EPA's position was the EPA's belief that the company had
owned and/or operated the Site. The company had advised the EPA that such was
not the case and does not believe that it is responsible for any testing or
clean-up at the Site based on current facts.

The EPA has identified sources and areas of contamination at the Roebling
Site which must be examined for potential environmental damage. The EPA has
disclosed that two surface clean-ups have been performed at a cost in excess of
$19 million. IN July 1996, the EPA completed a third Focused Feasibility Study
which defined the nature of the contaminants and evaluated appropriate remedial
alternatives, and the EPA estimated the cost of its preferred clean-up
alternative at $38 million.

On November 7, 1990 CF&I filed a petition for reorganization and
protection under Chapter 11 of the United States Bankruptcy Code. In the
bankruptcy proceeding of CF&I, the EPA was allowed an unsecured claim against
CF&I for $27.1 million related to the EPA's environmental investigations and
remediation at the Roebling Site.

In June 1996 the company received a Section 104 request issued by the EPA
under CERCLA seeking information about the company's (and CF&I's) connection to
the Roebling Site. On August 26, 1996, the company filed its response to the
Section 104 Request and, to date, has received no further communications from
the EPA concerning the Roebling Site. Based on the facts and circumstances
summarized above, the company does not believe it is responsible for any portion
of the Roebling Site clean-up.

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

No matters were submitted to a vote of security holders during the fourth
quarter of 1998.

PART I (continued)

EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the registrant are as follows:

Officer
Name Position Business Experience Age Since
- ---- -------- ------------------- --- -------

Robert S. Evans Chairman and Chief Chairman and Chief 54 1974
Executive Officer Executive Officer of the company
since 1984 and previously
President of the company

L. Hill Clark President and President and Chief Operating 54 1994
Chief Operating Officer, previously Executive Vice
Officer President of the company,
President of Lear Romec,
and previously held
various positions within
Allied Signal Inc., a diversified
manufacturing company

Augustus I. duPont Vice President, Vice President and General 47 1996
General Counsel Counsel and Secretary of
and Secretary the company, previously Vice
President, General Counsel and
Secretary of Reeves Industries, Inc.,*
a manufacturer of apparel textiles
and industrial coated fabrics, from
May 1994 to December 1995; Vice
President, General Counsel and
Secretary of Sprague Technologies,
Inc., a manufacturer of electronic
components, from May 1987 to
December 1993

Bradley L. Ellis Vice President- Vice President-Chief 30 1997
Chief information Information Officer of the
Officer company, previously with the
Business systems consulting group
of Arthur Andersen LLP.

Anthony D.
Pantaleoni Vice President Vice President - Environment, 44 1989
Environment, Health & Safety of the company
Health & Safety

John R.
Packard (1) Vice President Vice President - Human 44 1999
Human Resources Resources of the company,
Previously Human Resources
Director for Fortune Brands, Inc.

David S. Smith Vice President- Vice President - Finance 41 1991
Finance and and Chief Financial Officer
Chief Financial of the company, previously
Officer Vice President - Corporate
Development of the company

(1) Effective January 25, 1999

PART I (continued)
EXECUTIVE OFFICERS OF THE REGISTRANT(continued)

Officer
Name Position Business Experience Age Since
- ---- -------- ------------------- --- ------

Michael L. Raithel Controller Controller of the company 51 1985

Gil A. Dickoff Treasurer Treasurer of the company, 37 1992
previously Assistant Treasurer
of the company

Certain Proceedings
- -------------------
* Reeves Industries, Inc., a corporation which Mr.duPont served as Vice
President, General Counsel and Secretary from May 1994 to December 1995,
filed a petition and Plan of Reorganization for a consensual debt
restructuring under Chapter 11 of the United States Bankruptcy Code on
November 21, 1997.

PART II

Item 5. Market for the registrant's common stock and related stockholder
matters.
The information required by Items 5 is hereby incorporated by reference to Pages
35 through 37 of the 1998 Annual Report to Shareholders.

Item 6. Selected Financial Data.
The information required by Items 6 is hereby incorporated by reference to Pages
35 of the 1998 Annual Report to Shareholders.

Item 7. Management's Discussion and Analysis of financial condition and
results of operations.
The information required by Items 7 is hereby incorporated by reference to Pages
23 through 34 of the 1998 Annual Report to Shareholders.

Item 7A. Quantitative and Qualitative disclosures about market risks.
The company's cash flows and earnings are subject to fluctuations from changes
in interest rates and foreign currency exchange rates. The company manages its
exposures to these markets risks through internally established policies and
procedures and, when deemed appropriate, through the use of interest rate swap
agreements and forward exchange contracts. Long term debt outstanding of
$359,877 at December 31,1998 was generally at fixed rates of interest ranging
from 6 3/4% to 8 1/2%. At December 31,1998 no interest rate swap agreements
were outstanding and the amounts outstanding for forward exchange contracts were
not material. The company does not enter into derivatives or other financial
instruments for trading or speculative purposes.

Item 8. Financial Statements and supplementary data.
The information required by Items 8 is hereby incorporated by reference to Pages
9 through 35 of the 1998 Annual Report to Shareholders.

Item 9. Changes in and Disagreements with accountants on Accounting and
Financial Disclosure
None

PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by Item 10 is incorporated by reference to the
definitive proxy statement dated February 23, 1999, which the company has filed
with the Commission pursuant to Regulation l4A except that such information with
respect to Executive Officers of the Registrant is included, pursuant to
Instruction 3, paragraph (b) of Item 401 of Regulation S-K, under Part I.

PART III (continued)

Item 11. Executive Compensation

The information required by Item 11 is incorporated by reference to the
definitive proxy statement dated February 23, 1999, which the company has filed
with the Commission pursuant to Regulation l4A.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by Item 12 is incorporated by reference to the
definitive proxy statement dated February 23, 1999, which the company has filed
with the Commission pursuant to Regulation 14A.

Item 13. Certain Relationships and Related Transactions

The information required by Item 13 is incorporated by reference to the
definitive proxy statement dated February 23, 1999, which the company has filed
with the Commission pursuant to Regulation 14A.

PART IV

Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a)(1) The consolidated balance sheets of Crane Co. and subsidiaries as of
December 31, 1998 and 1997 and the related consolidated statements of
income, changes in common shareholders' equity and cash flows for the
years ended December 31, 1998, 1997 and 1996 and the report thereon of
Deloitte & Touche LLP dated January 20, 1999 appearing on Pages 9 through
22 of Crane Co.'s 1998 Annual Report to Shareholders which will be
furnished with the company's proxy statement as required by Regulation
14A, Rule 14a-3(c), are incorporated herein by reference

(2) Financial statement schedules for which provision is made in the
applicable regulation of the Securities and Exchange Commission have been
omitted because they are not required under related instructions or are
inapplicable, or the information is shown in the financial statements and
related notes.

(3) Exhibits:

Exhibit 10: Material Contracts:
The Crane Co. Stock Option Plan, as amended through
April 20,1998
Exhibit 11: Computation of net income per share.
Exhibit 13 Annual Report to shareholders for the year ended
December 31, 1998.
Exhibit 21: Subsidiaries of the Registrant.
Exhibit 23: Independent auditors' consent.

(b) Reports on Form 8-K:

Form 8-K filed 12/15/98 regarding reaffirming offer to shareholders of
Coltec Industries Inc.

PART IV (continued)

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(continued)

(3) There is incorporated by reference herein:
(a) The company's Certificate of Incorporation contained in Exhibit
D (Certificate of Designation) to the company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1987.

(b) The company's By-laws contained in Exhibit A to the company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1995.
(4) Instruments Defining the Rights of Security Holders, including
Indentures:
(a) There is incorporated by reference herein:
(1) Preferred Share Purchase Rights Agreement contained in
Exhibit 1 to the company's Report on Form 8-K filed with
the Commission on July 6, 1998.

(b) There is incorporated by reference herein:
1) Indenture dated as of April 1,1991 between the Registrant
and the Bank of New York contained in Exhibit 4.1 to the
company's report on Form 8-K filed with the Commission on
September 16, 1998.

(10) Material Contracts:
(iii)Compensatory Plans
There is incorporated by reference herein:
(a) The Crane Co. Restricted Stock Award Plan as amended through
May 6, 1996, contained in Exhibit A to the company's Form 10-Q
for the quarter ended March 31, 1996.
(b) The forms of Employment/Severance Agreement between the
company and certain executive officers (form I) and (form II)
which provide for the continuation of certain employee
benefits upon a change of control as contained in Exhibit C of
the company's annual report on Form 10-K for the fiscal year
ended December 31, 1994.
(c) The E.V.A. incentive compensation plan contained in Exhibit B
to the company's annual report on Form 10-K for the fiscal
year December 31, 1994.
(d) The Crane Co. Non-Employee Directors Restricted Stock Award
Plan as amended through May 10, 1993 contained in Exhibit B to
the company's annual report on Form 10-K for the fiscal year
ended December 31, 1993.
(e) The indemnification agreements entered into with each director
and executive officer of the company, the form of which is
contained in Exhibit C to the company's definitive proxy
statement filed with the Commission in connection with the
company's April 27, 1987 Annual Meeting.
(f) The Crane Co. Retirement Plan for Non-Employee Directors
contained in Exhibit E to the company's Annual Report on Form
10-K for the fiscal year ended December 31, 1988.

PART IV (continued)

(g) The Crane Co. 1998 Stock Option Plan contained in Exhibit 4.1
to the company's Registration Statement No. 333-50489 on Form
S-8 filed with the Commission on April 20, 1998.
(h) The Crane Co. 1998 Restricted Stock Award Plan contained in
Exhibit 4.1 to the company's Registration Statement No. 333-
50487 on Form S-8 filed with the Commission on April 20, 1998.

(i) The Crane Co. 1998 Non-Employee Director Restricted Stock Award
Plan contained in Exhibit 4.1 to the company's Registration
Statement No. 333-50495 on Form S-8 filed with the Commission
on April 20, 1998.

All other exhibits are omitted because they are not applicable or the
required information is shown elsewhere in this Annual Report on Form 10-K.

SIGNATURES

Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange
Act of l934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

CRANE CO.
-------------------
(Registrant)

By /s/ D. S. Smith
-------------------------
D. S. Smith
Vice President-Finance and
Chief Financial Officer
Date 2/22/99
-------

Pursuant to the requirements of the Securities Exchange Act of l934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

OFFICERS

/s/ R. S. Evans
-------------------------
R. S. Evans
Chairman, Chief Executive Officer and Director
Date 2/22/99
-------

/s/ D. S. Smith /s/ M. L. Raithel
------------------------------- ------------------------------
D. S. Smith M. L. Raithel
Vice President-Finance and Controller
Chief Financial Officer Principal Accounting Officer
Date 2/22/99 Date 2/22/99
------- -------

DIRECTORS

/s/ E. T. Bigelow, Jr. /s/ R.S. Forte
------------------------------ ----------------
E. T. Bigelow, Jr. R.S. Forte
Date 2/22/99 Date 2/22/99
------- -------

/s/ D.R. Gardner /s/ D. C. Minton
- ------------------------------ ----------------- --------------------------
D.R. Gardner W.E. Lipner D. C. Minton
Date 2/22/99 Date 2/22/99
------- -------

/s/ C.J. Queenan, Jr. /s/ J.L.L.Tullis
- --------------------------- ---------------------- ---------------
C.J. Queenan, Jr. J.L.L.Tullis B. Yavitz
Date 2/22/99 Date 2/22/99
------- -------