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CORRESP
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 Donaldson Company, Inc. Correspondence dated April 26, 2005

April 27, 2005

John Hartz, Senior Assistant Chief
Accountant
 Tracey Houser, Staff Accountant
 Division of Corporation Finance

United States Securities and Exchange Commission
 450 Fifth Street, N.W.
Washington, D.C. 20549

RE:

Donaldson
Company, Inc.
Form 10-K for the fiscal year ended July 31, 2004

Filed October 7, 2004

Forms 10-Q for the quarters ended October 31, 2004 and

January 31, 2005

File No. 1-07891

Dear Mr. Hartz and Ms. Houser:

This letter is in response to your
letter dated April 19, 2005 (the “SEC Comment Letter”) regarding the
above-mentioned filings. Pursuant to your request, we are responding to comments (1)
through (3) set forth in the SEC Comment Letter, in the order in which they appear in that
Letter. For your ease of reference, we have reproduced your comments in the text of this
letter.

The Company acknowledges
that:

the Company is responsible for the
 adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure
 in response to Staff comments do not foreclose the Commission from taking
 any action with respect to the filing; and

the Company 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.

Form 10-K for the year
ended July 31, 2004

MD&A, Results of
Operations

               1.

               If you had properly recorded the inter-company dividend in June of 2003, the
               quarterly net earnings would have been lower by  7.4%. This would also
               have eliminated an upward trend in earnings by showing less net earnings than
               the previous quarter  instead of the reported increase of 7%. APB 20
               requires that the correction of an error be recorded on a retroactive basis
               to the prior periods affected. However because you did not consider the
               amount of the errors to be material, you recorded  the correction in the
               fourth quarter of 2004. This caused the net earnings of that quarter to be
               understated by 8.4%. We  also note that the error represented 8.8% of
               segment earnings in 2004.

Because
you did not record the error in June 2003, you altered the trends in quarterly earnings.
You also note in your response, that if recorded, the lower earnings would have
caused you to not meet earnings expectations. Considering the magnitude of these
misstatements on quarterly earnings, please provide for us an expanded analysis of how
you and your auditors consider the materiality of this accounting error,
specifically addressing the impact on quarterly and segment earnings.

In
addition, it appears that the disclosures surrounding this accounting error could have
been more transparent. In order for the disclosures in Notes K and M to be
meaningful, you will need to provide explanatory footnotes describing that the fourth
quarter of 2004 and the Industrial Products segment were understated due to correcting
the error in that period rather than retroactively. Regardless of the disposition
of this issue, please explain to us how you intend to discuss the comparative
fourth quarter and segment earnings in future filings.

Donaldson Response
– 1

We performed a thorough analysis of
the impact of this error on all aspects of our reported results at the time that the error was identified and as explained in our
earlier response and supplemented below, concluded that restatement of our financial statements was not necessary due to
immateriality. We intended for our treatment to be forthright and transparent with respect to the error so that an investor would
have a full understanding of the amount and significance of the error. As discussed below, we will provide additional disclosure
in our Form 10-K for our fiscal 2005 year-end, based on the Staff’s observations that additional disclosure would be helpful
to the reader. This suggestion is consistent with our objective of providing transparent disclosure to our investors such that
they will have the necessary information to assess our performance this year compared to prior years.

At the time of our analysis, we
considered all of the observations pointed out by the Staff in the first two paragraphs of
Comment Number One in coming to our conclusion that the impact of this error was not
material to any portion of our reported results. We also obtained the concurrence of our
external auditors related to our conclusions. The following paragraphs provide further
explanation of our considerations related to our 2003 quarterly results and the impact of
the error on our segment earnings.

We believe that our conclusion was
consistent with the guidance in APB No. 28, paragraph 29, as the amount, representing 2.1% of 2004 and 2003 annual earnings, was
not material to our full fiscal year. While we acknowledged in our analysis of the error that the change in earnings from the
third quarter to the fourth quarter of 2003 was modified from an increase to essentially flat ($189,000 decrease), we did not
believe that this represented a trend. From quarter to quarter, it is not uncommon for us to experience a decrease in earnings
compared to the previous quarter. In fact, during fiscal 2003, the reported earnings of the first quarter were lower than the
fourth quarter of fiscal 2002, and the earnings of the second quarter of fiscal 2003 were lower than the first quarter of fiscal
2003. We have experienced a general increase in profits in the second half of our year, which results in our third and fourth
quarter results being generally stronger than the first and second quarter results. This remained consistent in both fiscal 2003 and 2004.

While we do not provide specific earnings guidance to our analysts, we
considered the impact that this error had on analysts’ expectations as part of our analysis. We noted that the error would
have caused us to miss the analysts’ expectations for the fourth quarter of 2003 by $0.015 (post-split basis), but the analysts’
expectations did not affect our judgment in closing the books for the fourth quarter of 2003 as we did not become aware of the
error until the fourth quarter of 2004. As those estimates are in the past, any adjustment to those numbers in the fourth quarter
of 2004 would not affect the historical estimates by analysts. Regardless of analysts’ expectations, we did announce to the
market the impact of the error as part of announcing our fourth quarter 2004 results, the quarter in which the error was
identified. At that time, we also announced the impact of warranty and litigation matters which impacted our results. We missed
the analysts’ expectations in the fourth quarter of 2004, but that was due to the litigation and warranty issues which also
occurred during the quarter. The correction of the error alone would not have caused us to miss expectations for the fourth
quarter of 2004. It should be noted that our stock price was not adversely impacted by the disclosure of our fourth quarter fiscal 2004
results. In fact, the stock traded essentially unchanged ($28.28 one day before announcement, $28.29 the day of announcement,
$28.24 the day after announcement). Because of the full disclosure we made at the time of our earnings announcement on August 31,
2004, analysts and investors were able to understand the impact of this error. Due to this disclosure, and given the relative immateriality of
the error, it resulted in minimal discussion on our analyst call.

Paragraph 29 of SFAS 131, Disclosures about Segments of an Enterprise and
Related Information indicates that segment information reported, “shall be the measure reported to the chief operating
decision maker for purposes of making decisions about allocating resources to the segment and assessing its performance.”
Paragraph 31 of that same standard discusses the need to provide explanations of the measurements of segment profit or loss.
Therefore, we will add additional disclosure to Note K (or its current year equivalent) in our Fiscal 2005 Form 10-K to discuss
the fact that management used these results for purposes of making decisions and allocating resources for both 2003 and 2004, but
the error was included in the 2003 results and corrected in the 2004 results. While we provided the analysis showing the impact of
the results on our segments to further support that the amount was not significant (less than 10% impact to a footnote

disclosure and did not impact the year over year trend),  we feel the numbers
themselves are appropriately recorded in accordance with SFAS 131 as those were the
results utilized by our chief operating decision maker.

The foregoing information should
provide the Staff with additional insight into the basis and rationale for our conclusion.
While we concluded that the error in question was not material, our intent has been and
remains to be forthright and transparent in our disclosures. We believe our disclosures,
including those that will be made in our fiscal 2005 Form 10-K, provide the readers with
all the information they need to assess the impact of this matter on our business’s
performance. Based on the Staff’s comments and observations that we could provide
additional information to help a reader of our financial statements assess our results, we
are prepared to provide additional information in Notes K and M in our upcoming Form 10-K
for our current fiscal year, ending July 31 to assist an investor’s understanding of
this matter, as set forth in the following proposed Notes:

Note K (or current year
equivalent note)

The following will be inserted after
the first table which lists key financial metrics by segment:

“During
fiscal 2004, an error was identified totaling $3.6 million (at 2004 exchange rates)
relating to 2003 transactions between certain European subsidiaries and the United States
in our Industrial Products Segment. We assessed the materiality of these transactions on
our reported results for both years and determined that they were not material. However,
if the error had been identified and recorded in 2003, the Industrial Products segment
would have reported $3.3 million less earnings before income taxes for 2003 and $3.6
million more earnings before income taxes for 2004. The difference between these two out
of period adjustments is due to exchange rate fluctuations between the US Dollar and the
Euro.”

Note M (or current year
equivalent note)

The following will be inserted after
the table of quarterly results related to 2004 quarters:

“During
fiscal 2004, an error was identified having an impact of $2.2 million on our net earnings
(at 2004 exchange rates). This error related to 2003 transactions between certain European
subsidiaries and the United States. We assessed the materiality of these transactions on
our reported results for the fourth quarter of 2004 and determined that it was not
material. However, if the error had been identified and recorded in 2003, our reported net
earnings would have been $2.2 million higher in the fourth quarter of 2004 than reported
above.”

In addition, in our upcoming fiscal
2005 Form 10-K, in situations where comparisons of 2005 to 2004 results are impacted by
the out of period adjustment in 2004, we will provide additional explanations, as
applicable.

We believe that based upon our
analysis of this matter which included analysis of the impact to our annual results,
trends followed by our investors and analysts,

segment results utilized to allocate
resources, the impact of the error was not material to any of our annual or quarterly
results. In addition, we have fully disclosed this amount to investors, who by their
reaction validated that this was an insignificant amount. We will add the disclosures
noted above to our future filings, beginning with our Form 10-K for the period ending
July 31, 2005 in order to add further transparency to investors as they read our
financial statements.

Note L Commitments and
Contingencies

               2.

               We note that on August 12, 2004 the Court ruled in favor of EPC and that they
               were entitled to enhanced damages, interest and attorney fees and
               expenses totaling $19 million. Statement of Accounting Standard No. 5
               “Accounting for Contingencies,” requires that when a
               contingent liability is both probable and estimable, the loss be accrued by a
               charge  to income. In 2004 you disclosed that you increased your reserve
               by $5 million. We assume that in accordance with GAAP, the entire
               reserve represents your best estimate of the ultimate amount of the loss.

Paragraph
9 of SFAS 5 notes that disclosure of the nature of an accrual, and in some circumstances
the amount accrued, may be necessary. In the past you have determined that such
disclosures were not necessary.

Paragraph
10 of SFAS 5 requires that you disclose an estimate of the additional possible loss or
range of loss or state that such an estimate cannot be made. You did not include
such disclosures in your Form 10-K for the year ended July 31, 2004, or in
subsequent interim reports. You have told us that you will now include these disclosures
in future filings, as required by GAAP.

Disclosure
of an adverse ruling, and an increase in the related reserve, without disclosure of the
total amounts accrued or the range of possible additional loss, could imply to a
reader that the increase provided fully for the higher range of possible loss.
Considering the nature of the contingency, we urge you to consider the guidance in
paragraph 9 of SFAS 5 which indicates that it may be appropriate to disclose the
amount of the total accrual.

We assume that your objective is to provide a clear, easy to understand, transparent
discussion concerning this substantial contingent liability. Therefore, in future
filings, include an appropriate discussion that addresses the related underlying
uncertainties such that a reader can gain an understanding as to why you believe that the
losses may not be as high as the entire amount of the ruling. Please avoid legal
generalities, and provide specific meaningful analysis to support the amount of
the reserve.

Please provide us with your proposed disclosures addressing the above concerns. We may have
further comment.

Donaldson Response
– 2

We confirm that the entire reserve
represents our best estimate of the ultimate amount of the loss. We have reserved an
amount for the EPC litigation in accordance with GAAP and our intent is to provide
investors with appropriate disclosure that assists them in understanding our financial
situation and the basis for our determination.

As indicated in our last response, we
will provide additional detail in future filings so that investors will have more
information on the range of additional possible loss. We believe with the disclosure of
the specific amount of potential additional loss ($12 million) and of the potential
outcomes it is not necessary to identify the exact dollar amount of the current reserve
and that to do so would not provide any further meaningful disclosure under Statement of
Accounting Standard No. 5, Accounting for Contingencies. With the proposed
additional disclosure, we believe an investor has adequate information to assess the level
of our reserve. Furthermore, the exact amount of the reserve is not required pursuant to
paragraph 9 of SFAS 5.

While the August 12, 2004 ruling gave
EPC a judgment of approximately $19 million, which includes pre-judgment interest,
EPC’s legal right to enforce that judgment is dependent upon the outcome of the
appellate process. The parties must await the appellate court’s determination of the
issues raised on appeal, all of which impact the proper damages, interest, attorne