In Memphis, there is a military depot whose shelves contain 40 million yards of bolt textile goods, enough to cover the full circle of the Earth's equator with band three feet wide.

Although the textiles are of a kind that can be bought commerically, the Department of Defense keeps $80 million worth of them in inventory at a substantial cost, according to a group of congressional investigators.

The military's decision to store the textiles, rather than purchase them on an as-needed basis, is at the core of a dispute between the House Appropriations Subcommittee on Defense, which determines how the military can spend money, and DOD's main supply organization, the Defense Logistics Agency.

According to an unreleased report, the committee's surveys and investigations staff found that, during fiscal 1976, there was not a single request for 558-931 of the 1.4 million items in DLA's inventory.

DLA's total inventory is worth about $3.2 billion, the report said. The items with zero demand in fiscal 1976 were worth more than $248 million, and it cost about $88 million that year for warehousing, management, and cataloguing just to keep them in depots around the country, the committee's staff found.

There were another 172,292 items with only 1 demand in fiscal 1976, 101931 with 2 demands, and 69,829 with only 3. The report found 129,612 items with more than 20 demands that year.

The committee staff feels it is wasteful for the military to keep in stock large numbers of items that are (DLA) stocks, for the most part are made up of of common-type, low-dollar-value, consumable items, many of which are commercially available," reads the report.

In all, as much as $1 billion of DLA's stocks could be purged with little adverse effect on the military, the report says.

Lt. Gen. Woodrow W. Vaughan, the man who heads DLA, disagrees with the report's assessment of his agency.

"If an item is a low demand or a high demand, we have to have it, "Vaughan said. "Where are the commercially available stores in Tanganyika? Where are the commercially available stores in Vietnam?"

Vaughan acknowledges that most of the supplies DLA stocks are inexpensive and not complex, but points out that some of them are crucial to the operation of important weapons systems.

"If it's critical weapons system, a Polaris or Titan missile, the risk of that item being inoperable for lack of a cotter pin is very high . . . "For items like that, even though the demand is small, we've got to have them, because the country can't afford to have critical weapons systems inoperable for want of something simple like a valve."

Nevertheless, Vaughan said, he has begun to purge from DLA's shelves items for which there has been no demand for the last five or six years. In six months, he said, 45,000 of 145,000 items with no demand for six years have been cleared out.

There is a clear difference in viewpoint here that creeps into the discussion between the congressional staff and the 37-year veteran of military supply wars. In the contest between cost and potential military need, the staff report comes down clearly on the side of reducing costs. For Gen. Vaughan, a potential military need is paramount.

"I can tell you this," Vaughan said. "You cannot keep an Army, a Navy, and an Air Force in an operational manner without money."

Eyeing the same set of facts, the committee's report reaches an different conclusion. "It is a freely acknowledged concept among (DLA) officials that (DLA) does not attempt to relate cost to performance levels, but is service oriented, and that supply support cannot be degraded for considerations."