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04/28/05 reply to SEC 4/15/05 letter

April 28,
2005

Via
Federal Express and Facsimile

Mr. David
Ritenour

Special
Counsel

Division of
Corporation Finance

United States
Securities and Exchange Commission

450 Fifth Street,
NW.

Mail Stop
3-6

Washington, D.C.
20549

      Re:

      Caterpillar
      Inc.

      Amendment
      No. 1 to Registration Statement on Form S-4

      Filed
      March 23, 2005

      File
      No. 333-121003

Dear Mr.
Ritenour:

We
have received your comment letter dated April 15, 2005. Caterpillar’s responses
to each item follow each comment.

Summary
of the Exchange Offer - Page 2

Certain
U.S. Federal Income Tax Consequences - Page 4

1.
We
note your response to comment 7, but continue to believe that additional summary
disclosure regarding the material U.S. federal income tax consequences of the
exchange is appropriate. As previously requested, briefly identify all matters
upon which tax counsel has opined, all matters upon which tax counsel has given
a qualified opinion, and all matters upon which counsel is unable to opine.
Please also discuss the consequences to investors in the event that the early
participation payments were ultimately determined to constitute fees paid for
investors’ early tender. Further, please revise the subheading here and
elsewhere throughout the prospectus to substitute the word “material” for the
word “certain,” consistent with your obligation to discuss all material U.S.
federal income tax consequences of the exchange and an investment in the
debentures.

Response:

We
acknowledge the staff’s comment. We have revised the summary of the material
U.S. federal income tax consequences to include a description of the tax opinion
of counsel we received, the issue on which tax counsel provided a qualified
opinion, and the issues on which tax counsel was unable to opine. We also
inserted a sentence describing the federal income tax consequences of receiving
the early participation payment in the event such payment is recharacterized as
a fee. Finally, we have replaced the word “certain” with the word “material”
when describing our discussion of the U.S. federal income tax consequences of
the exchange and of holding the new debentures.

Risk
Factors - Page 9

The
total exchange price will be determined based on the yield of the 5.375% U.S.
treasury Note due February 15, 2031 at the price determination time - Page
9

2.
This
risk factor caption currently includes only a statement of fact. Risk factor
captions should describe the risk that results from the fact or uncertainty
discussed in the text of
the risk factor. Please revise this risk factor caption to ensure it describes
the risk that you discuss in the text.

Response:

We
acknowledge the staff’s comment and have revised the relevant risk factor
caption to alert investors to the risk that they may not know the total exchange
price at the time of tender.

Certain
U.S. Federal Tax Consequences - Page 27

3.
We
note your response to comment 16 and the revisions to the first paragraph of
this section. Please note, however,
that it is not appropriate for tax counsel to simply opine on the discussion of
the tax consequences that appears in the prospectus. Counsel must opine on
specifically identified material tax consequences, and a summary of counsel's
opinion (or, if a short form tax opinion is being provided, the corpus of
counsel's opinion itself) must appear in the prospectus. You should also
identify in the prospectus all matters upon which tax counsel has given a
qualified opinion and all matters upon which counsel is unable to opine, and
briefly discuss the reasons for each qualified opinion and the reasons why
counsel is unable to opine on certain matters. Please revise
accordingly.

Response:

We
have revised the description of tax counsel’s opinion, and tax counsel has
revised its opinion, to provide that the legal conclusions discussed in the
section entitled, “Material U.S. Federal Income Tax Consequences,” subject to
the limitations and qualifications set forth therein, represent the opinion of
tax counsel. In addition, we have identified throughout the discussion specific
material tax consequences that are included in such opinion. We have included
the opinion provided by tax counsel as an exhibit to the registration statement.
We have also amended the discussion of material U.S. federal income tax
consequences to describe and explain the one item on which tax counsel gave a
qualified opinion and the two items on which tax counsel was unable to
opine.

4.
We
note your responses to comments 7 and 18. Since tax counsel is unable to give an
unqualified opinion with respect to whether the exchange will qualify as a
tax-free recapitalization, please revise to discuss the alternative material
U.S. federal income tax consequences in the event the exchange is not treated as
a recapitalization. Please also include appropriate risk factor
disclosure.

Response:

We
have revised the discussion of the material U.S. federal income tax consequences
to include a description of the tax consequences of a modification of a debt
instrument that is not treated as a “significant modification” and, therefore,
is treated as a continuation of the old debt instrument rather than an exchange
for U.S. federal income tax purposes. This possible recharacterization of the
new debentures as a continuation of the old debentures is the reason for the
qualified opinion on this issue and, in such event, would not require a holder
to recognize gain or loss. We respectfully suggest that, because the
consequences of such treatment are that a holder would not recognize gain or
loss on the exchange, no risk factor is necessary.

Exhibit
Index

5.
We
note your representations in response to comments 16 and 19 that you will file
by amendment both a New York legal opinion and a tax opinion. Please note that
we may have further comments regarding those opinions and the related disclosure
in the prospectus once we have the opportunity to review those
opinions.

Response:

We
will
file
the
form of tax opinion
provided by our outside tax counsel as Exhibit 8 to
Amendment No. 2 to the
registration statement. The tax opinion
will be finalized at the
time of effectiveness of the registration statement. In addition, we will file
an opinion of counsel as to the validity of the new debentures as Exhibit 5.1 to
Amendment No. 2. With respect to
all matters of New York law, counsel relied upon the legal opinion of Sullivan
& Cromwell LLP that we will file
as Exhibit 5.2 to Amendment No. 2.

Please contact
either myself or our Securities Counsel, Sean McKessy ((309) 675-1094), should
you have any questions or wish to discuss our responses further. Thank
you.

Very truly
yours,

/s/ James B.
Buda

James B.
Buda

Caterpillar
Inc.

General Counsel,
Vice President and Secretary

Telephone (309)
675-4428

cc: Mary Beth
Breslin