UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.  20549

Schedule 13G

Under the Securities Exchange Act of 1934
(Amendment No. 4)*

CHESAPEAKE CORP.
(Name of Issuer)

Common Stock
(Title of Class of Securities)

165159104
(CUSIP Number)

Year End (12/31/98) 13G STATEMENT
(Date of Event which Requires Filing of this Statement)

*The remainder of this cover page shall be filled out for
a reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter the 
disclosures provided in a prior cover page.

The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise 
subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the
Notes).


Page 1 of 6 Pages



CUSIP No. 165159104			13G

1	NAMES OF REPORTING PERSONS I.R.S.
	IDENTIFICATION NOS. OF ABOVE PERSONS
(Entities Only)
MacKay-Shields Financial Corporation     13-2631681

2	CHECK THE APPROPRIATE BOX IF A MEMEBER
OF A GROUP
	(a)
	(b)
	Not Applicable

3          SEC USE ONLY

4          CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware (United States)

NUMBER OF	5   SOLE VOTING POWER
SHARES	Not Applicable

BENEFICIALLY	  6 SHARED VOTING POWER
OWNED BY 	Not Applicable

EACH	       7 	SOLE DISPOSITIVE POWER
REPORTING	Not Applicable

PERSON      8	SHARED DISPOSITIVE POWER
WITH		Not Applicable (See note at Item 4a below)


9	AGGREGATE AMOUNT BENEFICIALLY OWNED
	   BY EACH REPORTING PERSON
	    Not Applicable

10	CHECK IF THE AGGREGATE AMOUNT IN
	   ROW (11) EXCLUDES CERTAIN SHARES
		Not Applicable

11	PERCENT OF CLASS REPRESENTED BY AMOUNT
   IN ROW 11
   0%

12	TYPE OF REPORTING PERSON

	   IA






Page 2 of 6 Pages




SCHEDULE 13G cont.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Under the Securities Exchange Act of 1934

ITEM 1	(a)	Name of Issuer:
		CHESAPEAKE CORP.
(b)  Address of Issuer's Principal Executive Offices:
		1021 EAST CARY STREET
		RICHMOND, VA  23218
ITEM 2	(a)	Name of Person Filing:
		MacKay-Shields Financial Corporation
(b)  Address of Principal Business Office:
		9 West 57th Street
		New York, NY  10019
(c)  Citizenship:
		United States
(d)  Title of Class of Securities:
		Common Stock
(e)  CUSIP Number:
		165159104
ITEM 3.		If this statement is filed pursuant to Sections 240.
		13d-1(b), or 240.13d-2(b) or (c), check whether 
the person filing is a:

(a)	[  ]	Broker or dealer registered under Section 15
		of the Act (15 U.S.C. 78o);
(b)	[  ]	Bank as defined in section 3(a)(6) of the Act
 	(15 U.S.C. 78c);
(c) 	[  ]	Insurance Company as defined in section 3(a)(19)
		of the Act (15 U.S.C. 78C); 
(d)	[  ]	Investment company registered under Section 8
		of the Investment Company Act if 1940
(15 U.S.C. 80a-8);
(e)	[x]	An investment adviser in accordance with Section
		240.13d-1(b)(1)(ii)(E);
(f)	[  ]	An employee benefit plan or endowment fund
		in accordance with Section 240.13d-1(b)(1)(ii)(F);
(g)	[  ]	A parent holding company or control person
		in accordance with Section 240.13d-1(b)(1)(ii)(G);
(h)	[  ]	A savings associations as defined in Section 3(b)
		of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(i)	[  ]	A church plan that is excluded from the
		definition of an insurance company under
		Section 3 (c)(14) of the Investment Company
		Act of 1940 (15 U.S.C. 80a-3);
(j)	[  ]	Group, in accordance with section 240.13d-1
		(b)(1)(ii)(J).


Page 3 of 6 Pages



SCHEDULE 13G cont.


ITEM 4.	Ownership.

	Provide the following information regarding
	the aggregate number and percentage of the
	class of securities of the issuer identified in 
	Item 1.

(a)	Amount Beneficially Owned:
	0

(b)	Percent of Class:
	0%

	(c)	Number of shares as to which such person has:

(i)  sole power to vote or to direct the vote
	Not Applicable
(ii)  shared power to vote or to direct vote
	Not Applicable
(iii)  sole power to dispose or to direct the
       disposition of 
	Not Applicable
(iv)  shared power to dispose or to direct the
       disposition of
Not Applicable

ITEM 5.  Ownership of Five Percent or Less of a Class.

	If this statement is being filed to report the fact that
as of the date hereof the reporting person has ceased to
be the beneficial owner of more than five percent of the
class of securities, check the following [x].

	













Page 4 of 6 Pages 






SCHEDULE 13G cont.


ITEM 6.	Ownership of More than Five Percent on Behalf of Another
	Person

	If any other person is known to have the right to receive or the
	power to direct the receipt of dividends from, or the proceeds
	from the sale of, such securities, a statement to that effect
	should be included in response to this item and, if such interest 
	relates to more than five percent of the class, such person should
be identified.  A listing of the shareholders of an investment
company registered under the Investment Company Act of 
1940 or the beneficiaries of employee benefit plan, pension
fund or endowment fund is not required.

Not Applicable

ITEM 7.	Identification and Classification of the Subsidiary Which 
	Acquired the Security Being Reported on By the Parent
	Holding Company.

If a parent holding company has filed this schedule, pursuant
to Rule 13d-1(b)(ii)(G), so indicate under Item 3(g) and
attach an exhibit stating the identity and the Item 3
classification of the relevant subsidiary.  If a parent
holding company has filed this schedule pursuant to 
Rule 13d-1(c) or Rule 13d-1(d), attach an exhibit stating
the identification of the relevant subsidiary.

	Not Applicable

ITEM 8.	Identification and Classification of Members of the Group.

If a group has filed this schedule pursuant to Section
240.13d-1(b)(1)(ii)(J), so indicate under Item 3(j)
and attach an exhibit stating the identity and 
Item 3 classification of each member of the group.
If a group has filed this schedule pursuant to Section 240.
13d-1( c) or Section 240.13d-1(d), attach an exhibit stating
the identity of each member of the group.

	Not Applicable







Page 5 of 6 Pages








SCHEDULE 13G cont.


ITEM 9.	Notice of Dissolution of Group

	Notice of dissolution of a group may be furnished as
	an exhibit stating the date of the dissolution and that
	all further filings with respect to transactions in the
security reported on will be filed, if required, by 
members of the group, in their individual capacity.
See Item 5.

	Not Applicable

ITEM 10.	Certification


By signing below I certify that, to the best of my 
knowledge and belief, the securities referred to above 
were acquired and held in the ordinary course of 
business and were not acquired and are not held for
the purpose of or with the effect of changing or 
influencing the control of the issuer of such securities
and were not acquired and are not held in connection
with or as a participant in any transaction having that
purpose of effect.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.

Date:		February 8, 1999

Signature:	/s/ Robert A. Nisi

Name/Tittle:	Robert A. Nisi, Chief Compliance Officer


Page 6 of 6 Pages