Washington Post Co. Chairman Katharine Graham warned fellow newspaper publishers today that damage to their business caused by a recent Pulitzer Prize scandal involving a Washington Post reporter "could be compounded if the wrong lessons are drawn."

In a keynote address to the 95th convention of the American Newspaper Publishers Association, of which she is the current president and chairman, Graham said a real danger "is that we will become so nervous that we will go to the other extreme, and not do the job that a free press is supposed to do . . . this unhappy episode must not be allowed to result in any curtailment of the First Amendment in other forums."

She also rejected as "an insult to hundreds of promising young reporters and editors" the suggestion that because a young, black reporter was involved, the Pulitzer Prize episode "is somehow the result of the pressures on papers to recruit and promote minorities."

Rather, Graham asserted, "The problem we should be focusing on in connection with minority journalists is there are not enough of them working for newspapers."

In her first public reaction to former Post reported Janet Cooke's return of the Pulitzer Prize after her winning feature story about an alleged eight-year-old herion addict proved to be false, Graham said today that "clearly the editing process at the Post did not work as it should have."

Stating that nothing "would guarantee that an incident like this could not recur," Graham said that among its lessons are the following:

"We need to be as tough and skeptical concerning our own stories and our own personnel as we are concerning the world outside that we report. Protecting the confidentiality of sources ought not to mean that reporters withhold information from a senior editor, except in the most extraordinary circumstances. More attention should be paid, too, to the training and supervision of young reporters. We need to re-examine our procedures and assumptions all along the editing chain."

Graham's comments came during a generally sober assessment of the newspaper industry, at a time when a communications revolution is creating new competition for the daily press and a recent Gallup Poll has shown that Americans find television and news magazines more accurate and unbiased new sources than newspapers.

In fact, she noted, the number of daily newspapers in the United States fell last year to 1,745 from 1,763 in 1979 and was the lowest level since 1944. Daily circulation also declined slightly to 62.2 million, after four years of modest growth, although Sunday newspaper circulation was at a record high of 54.7 million compared with 54.4 million a year ago.

Graham said that part of the answer to why more people are not buying newspapers is the proliferation of alternative media voices, ranging from free-circulation publications to news channels on cable television.

"But an even greater part of the problem, I fear, is that we have not responded adequately to the challenge of change," Graham told the newspaper business executives. "Too many newspapers offer essentially the same mix of information that they were providing in the 1950s."