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CORRESP
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      10/17/05 response to 09/26/05 comment letter

    October
      17,
      2005

    Filed
      via EDGAR

    Cecilia
      D. Blye,
      Chief

    Office
      of Global
      Security Risk

    Division
      of
      Corporation Finance

    Securities
      and
      Exchange Commission

    100
      F Street,
      N.E.

    Washington,
      DC
      20549-5546

              Re:

              Caterpillar
                Inc.

              Form
                10-K for the
                fiscal year ended December 31, 2004

              File
                No.
                1-00768

    Dear
      Ms.
      Blye:

    Caterpillar
      Inc.
      (“Caterpillar”) wishes to provide supplemental information to address the issues
      raised in your letter of September 26, 2005. For your convenience, we have
      included your comments in this response in italics.

    General

    We
      are aware of
      publicly available sources that report you have opened a sales and after-sales
      office in Tehran; you plan to pursue business opportunities in Iran; your
      vehicles will be distributed in Iran; and you will sell construction machinery
      to Iranian companies. Please briefly describe for us the nature and extent
      of
      any operations and customer relationships you have in Iran. Advise us whether
      your customers include or have included agencies of, or enterprises controlled
      by, the Iranian government. Advise us also whether, to the best of your
      knowledge, information and belief, any of your products sold or slated for
      sale
      to or in Iran, or any of their component parts, can be used for military
      purposes.

    Caterpillar
      is
      aware of reports claiming that it plans to open a sales office in Iran. These
      reports are false and Caterpillar has so advised the publisher of at least
      one
      such report. Caterpillar has not opened a sales and after-sales office in Tehran
      and has no plans to do so. Neither Caterpillar nor any of its subsidiaries
      has
      established or maintains any office, branch or subsidiary in Iran.

    Page
      1

      Several
        of
        Caterpillar’s European subsidiaries sell products to Iran, either directly or
        through independently owned and operated dealers. Identifiable sales in Iran
        in
        2004 were immaterial, both in terms of total sales and revenues and profits.
        Caterpillar is in compliance with applicable trade statutes and regulations.
        The
        products sold to Iran were predominantly heavy equipment and engines used
        for
        general agricultural or construction purposes, as well as replacement parts
        for
        such machines. As you may be aware, state ownership of large enterprises
        in Iran
        is fairly common and some products have been supplied to state-owned
        enterprises, such as engines supplied to a state-owned shipyard for
        incorporation into merchant vessels and to a state-owned car manufacturer
        for
        its power plant. To the best of Caterpillar’s knowledge, information and belief,
        none of the products or component parts that are sold to Iran are used for
        military purposes.

    In
      view of the
      fact that Iran has been identified by the U.S. State Department as a state
      sponsor of terrorism, and is subject to OFAC-administered economic sanctions,
      please advise us of the materiality of your contacts in Iran, and give us your
      view as to whether those contacts constitute a material investment risk
      for
      your securityholders. In preparing your response, please consider that
      evaluations of materiality should not be based solely on quantitative factors,
      but should include consideration of all factors that a reasonable investor
      would
      deem important in making an investment decision, including the potential impact
      of corporate activities upon a company’s reputation and share value. In this
      regard, we note that legislation requiring divestment from, or reporting of
      interests in, companies that do business with U.S.-designated state sponsors
      of
      terrorism has been adopted by Arizona and Louisiana.

    Caterpillar
      currently has no offices and its subsidiaries and dealers have few customers
      in
      Iran. From a financial perspective, Iran is a very small market for Caterpillar
      products. Identifiable sales in Iran in 2004 were immaterial, both in terms
      of
      total sales and revenues and profits. From a qualitative and reputational
      perspective, Caterpillar products are used in civilian applications, and not
      for
      the development or production of advanced technologies. Caterpillar is not
      aware
      of any activities by its subsidiaries’ dealers or customers in Iran that would
      pose a material investment risk to persons considering investing in Caterpillar.

    Caterpillar
      has
      also considered the statutes in Arizona and Louisiana requiring investment
      managers for public pension funds to report or to divest portfolio holdings
      in
      companies doing business in U.S.-designated state sponsors of terrorism. When
      requested, Caterpillar has provided information sought in connection with such
      laws, and the company will continue to do so in the future. In the company’s
      view, the sale of a nominal amount of products in Iran by foreign subsidiaries
      or independent dealers does not present a material investment risk for the
      company’s securityholders. Moreover, there is no reason to believe that any
      divestiture by investment managers of state pension funds would have material
      adverse effects on the company's securityholders.

      Page
        2

    Acknowledgement:

    On
      behalf of the company, the undersigned acknowledges that:

            ·

              Caterpillar
                is responsible for the adequacy and accuracy of the disclosures it
                has
                made in its filings, including its Form 10-K for the fiscal year
                ended
                December 31, 2004;

            ·

              Staff
                comments or changes to disclosure in response to staff comments do
                not
                foreclose the Commission from taking any action with respect to
                Caterpillar’s filings; and

            ·

              Caterpillar
                may not assert staff comments as a defense in any proceeding initiated
                by
                the Commission or any person under the federal securities laws of
                the
                United States.

    Please
      contact the
      undersigned if you need any further information.

    Respectfully
      submitted,

    /s/
      James B.
      Buda

    James
      B.
      Buda

    Vice
      President and
      General Counsel

    Caterpillar
      Inc.

    100
      NE Adams
      Street

    Peoria,
      IL
      61629

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        3