Remember the early obituaries for the mutual fund industry, back in the mid-1970s?

Sales of common stock mutual funds last year soared 87 percent, bringing this most-common type of funds to the highest level of investment by Americans in 11 years.

The number of mutual fund shareholders rose to more than 11 million in 1980, a record level. Total mutual fund assets were up more than 45 percent to a record of about $138 billion. And this once-mourned-over investment company industry is now twice the size it was two years ago.

This sharp recovery should sound a note of caution to those analysts who predict, from time to time, the demise of certain investment vehicles. The innovation of money market mutual funds at the time of great inflationary pressures added a new life to the industry and demonstrated that the concept of pooling investments by many individuals in a fund remains sound.

But there is an interiguing question before the public, as the new year begins, about dissemination of information to investors in mutual funds. If the issue is not handled properly, it is possible that the industry could lose some of the valuable credibility that has been restored on the basis of recent performance.

This is not the time to eliminate quarterly reporting of investment company holdings and transactions, as proposed recently the Securities and Exchange Commission under the guise of a need to reduce excessive government regulation. Government rules that force publication of investment-type information are not excessive at all but vital to the free marketplace that has helped persuade investors in recent months that mutual funds are something they should consider.

There has been a lot of controversy, for example, about measuring the performance of money market mutual funds. The comparisons that are published regularly, while not a simple or perfect guide, at least offer the foundation for making some judgments.

The assets of these money market funds are now at $76 billion, compared with $45.2 billion a year earlier and just $11 billion two years ago.

"Among all the developments in investing since the end of World War II, the advent of money market funds was certainly one of the most important," said Investment Company Institute (ICI) President David Silver last week. "Hundreds of thousands of people have had their first experience of investing through these mutual funds."

As dramatic as the growth of money market funds has been, the most underrated mutual fund development in 1980 was the growth of common stock mutual funds.

An investor who put money into a common stock mutual fund at the beginning of last year would have had an increase on average of 31 percent through Dec. 23, according to calculations by Computer Directions Advisors, Inc. of Silver Spring and the ICI, an industry trade association. This was more than twice the increase in the cost of living (up about 13 percent).

Funds that typically invest aggressively in stocks of corporations with high growth potential shot up 47 percent. Funds that look for long-term growth of capital advanced 34 percent. Growth and income funds, which seek both long-term capital appreciation and current income, rose 24 percent.

When all the figures for 1980 are tabulated on common stock mutual funds, sales of $5.5 billion for the year are espected to exceed redemptions (cashing in existing shares) by some $380 million, the first year this has happened to common stock funds since 1971.

And Silver notes that the favorable investment results for the past year do not depend on the choice of a praticular period. "In the last three years, common stock funds have gone up 97 percent. In the last five years, the average increase was 139 percent," he said. The Standard & Poor's 500-stock average rose just 89 percent over the same five years.

But what will happen if the SEC proposal on eliminating mutual fund quarterly reporting is approved?

Robert A. Levy, president of Computer Directions Advisers, says quarterly reports now required "are an integral part" of his firm's regular monitoring of industry performance. It is his company's data that has been used by the ICY to chart industry performance last year and in recent years. u

Basically, the reports in question provide quarterly data on portfolio holdings. "Is it conceivable that any investment company would not know from quarter to quarter what stocks it holds?" Levey asks, knowing that every reputable fund must have such information to stay alive. "The marginal cost of compliance [filing the SEC reports] is trivial," he said.

To replace quarterly reports, the SEC has suggested annual filings with the same data.But Levy notes that such reports are due four months after the end of the year. "They are simply too late and too infrequent to be useful -- particularly for investment companies whose portfolio turnover rates are typically higher than those of bank trust departments," Levy argues.

Summing up, he states: "There is considerable difference between regulation on the one hand, which impedes the day-to-day operations of a business, and disclosure on the other hand, which results in a freer flow of information -- the single most essential ingredient of a competitive market, [making] the securities markets more efficient while enhancing public trust and confidence in our financial institutions."

Levy is urging individuals to write to the SEC before a Jan. 23 deadline for comments on the proposed changes. It is understandable that Levy wants to protect a source of information that allows his firm to compile valuable data for investors, which he sells and for which his firm has become recognized in the Wall Street community.

But there is more at stake here. In moving toward the laudable goal of ending unnecessary government regulationagencies must not discard some requirements just because they may be a nuisance to business. Government regulators must take a broader view and determine which regulations may indeed be in the best interests of the whole society, including the businesses involved, even if the businesses don't think so.

Providing disclosure to investors and the public should be among government rules that remain on the books to be enforced, for the reasons that Levy has stated so well. An era of reduced government regulation should not be used as the rationale for permitting more secrecy in business -- especially business owned by the public.