IN 1958, at about the same time that a decision was made to remainder The Wapshot Chronicle , John Cheever was presented with the esteemed National Book Award for fiction. Upon receipt of that good news, Harper & Row, then Cheever's publisher, rescinded the death sentence, reasoning that the prize would renew interest in the novel and generate sales. They were mistaken. The Wapshot Chronicle sold no better after it got the NBA than it did before.

This year, when James Schuyler won the Pulitzer Prize for poetry, Michael di Capua, editor in chief at Farrar, Straus and Giroux, held his breath waiting to see what was going to happen to Schuyler's The Morning of the Poem . "On publication date, we had about 900 copies out in paper," di Capua says. "Since the Pulitzer we put out only about 300 more." p

"Prizes are for the birds," Louis Auchincloss mutters venomously. "The idea is that it encourages writers and stimulates the arts. My position is the reverse. It fills the head of one author with vanity and 30 others with misery. The real function of prizes is to establish a character reference for authors not to care about such trumpy, junky things."

If prizes do not stimulate commerce, but do cause in creative people unheavals of antagonism and self-pity, why in heaven's name do we annually hand out the almost 200 general adult literary awards to the writers of our land? "It beats me," says Robert Gottlieb, president and editor in chief at Knopf. "Competition in the arts is not useful. So you've won the prize, so what? It doesn't help you to sell the books, and it doesn't help you to write better. It's pointless: there is no such thing as the best."

Two of Gottlieb's authors, Carl E. Schorske and Robert K. Massie, won the Pulitzer this year and, in the past, Knopf has been awarded a superabundance of acclaim, so envy can play no part in the editor's dismissal of awards. In Auchincloss' case, however, sour grapes indeed may be involved. An unusually productive and popular writer, Auchincloss has collected a slew of prizes, the names of which, like the Lotus Club Award, he has to research, but he has never been celebrated in the big time. "I would take it like a shot if I won," he snaps, "but it wouldn't change my attitude." As if to put him to the test, Auchincloss was recently invited to serve on the Pulitzer fiction panel. "I turned them down," he says. "I would rather have my navel cut than put myself in the machinery of giving awards."

Despite the glut of prizes, including some wonders like the Count Dracula Society Awards, friends and foes of such compensation agree that few awards have meaning and credibility beyond the obvious gratification of the winner's ego. Lists differ, but among fair-minded folk the chosen would include the American Academy and Institute of Arts and Letters awards in literature (particularly the Gold Medal), the John Simon Guggenheim Memorial fellowships, the National Book Critics Circle awards and the Pulitzers, even after the Janet Cooke affair. The jury is still out on The American Book Awards, which replaced the National Book Awards two years ago. The general feeling is that the NBA looks better and better in retrospect and that the ABA is only beginning to find itself after a widely and justly critized beginning, but that the future looks promising.

Highest honor and highest value go to the Nobel Prize, but it is an international award and not without its own detractors. Politics often color the Nmobel choices, complain the critics, a charge common to almost every award extant. I don't think you can give awards to living writers without it being political," warns Marian Wood, executive editor at Holt, Rindhart and Winston.

Only the Nobel actually sells books. Specialized awards, like the more than 70 children's book awards, also help sales, particularly the Newberry and Caldecott Medals, which guarantee financial as well as artistic glory. "When you win one of those medals you're going to sell 50,000 books in a year," says Mimi Kayden, associate publisher of children's books for Dutton. "The sales may taper off for the next few years, but every book which has won the Newberry is still in print."

Warts and all, awards tend to flourish and new one crop up regularly. The latest and most starting is the John D. and Catherine T. MacArthur Foundation Prizes. Twenty-onw fellows were named in May as part of a program that stresses "exceptionally talented individuals," and awards them between $24,000 and $60,000 annually for five years.

Not everyone in the literary community is against awards. "I can't think of anything that would make me feel blase or anything except grateful for prizes," Eudora Welty says, and she should know, having won heaps of them. Welty says she probably cherishes most the Gold Medal she received from the Academy and Institute of Arts and Leters, but she hasn't forgotten that it was because of a Guggenheim in the '50s that "I went out to see the world." Welty is especially grateful for awards made by "my peers and superiors," and she is in concert with John Cheever, who says, "to be given an award by someone you esteem is deeply gratifying."

Jonathan Galassi, a young, highly regarded editor at Random House and an advocate of prizes, makes the distinction that they are useful if not attached to the selling of books. He particularly favors poetry awards because "poetry limps with little encouragement, and in publishing, poems sales don't really matter. The point is to make the books available."

Sometimes winning an award can help a writer's track record, and that is why Karen Kennerly, the executive director of PEN-American Center, favors them. Kennerly credits a valid award with helping to get the next book published with a larger advance, as well as coloring the way a reviewer may pick it up. And she cites "the wonderful things an award can do for a writer's morale. It can keep somebody going, fire them up." Kennerly rejects Auchincloss' assumption that missing out on an award causes negative feelings. "Most writers write off not winning by saying awards are arbitrary," she says.

A recent example of what many observers believe to be arbitrariness at its most blatant is this year's posthumous Pulitzer for fiction to John Kennedy Toole for A Confederacy of Dunces . The book rose to the No. 1 position on trade paperback best-seller lists after winning the Pulitzer, which arrived almost coincidentally with its paperback publication date. Kent Carroll, who purchased the paperback rights to the novel when he was at Grove Press, reports that the Pulitzer, which boosted the inprint figure from 400,000 to 700,000, in a sense "certified" the book and made it "literature."

But in many minds great literature is exactly what the novel is not, although upon publication it received generally favorable reviews, and the prize has caused a vicious backlash. Confederacy became a literary cause celebre in hardcover when an endless stream of stories chronicled how Toole's mother fought to get the book published following her son's suicide. Finally, after Walker Percy read and liked the book, the Louisiana State University Press agreed to publish it. This was the stuff of great drama, and some observers believe the sage sold the book more than the book itself. These cynics boiled when Confederacy got the Pulitzer.

"It would not have won if it hadn't been popular in the first place," Galassi says, reflecting a common theory. "That's ana example of the Pulitzer Prize committee thumbing its nose at commercial publishers, saying you should have published this book."

Confederacy is the exception to many rules, especially in paperback where, according to Jack Romanos, Bantam's new publisher, awards virtually have no impact on sales beyond the first couple of days. Recently Romanos carefully tracked the sales of The Medusa and the Snail by Lewis Thomas, which won a TABA this year, and found that "it had absolutely no effect." Yet, in principle, he champions awards to honor authors for excellence, regardless of whether or not the prizes sell books.

He cautions, however, against miscasting a book after it wins a literary prize. "When Jerzy Kosinski won the NBA for Steps , we made the mistake of going after a target audience much more literary than it should have been," Romanos recalls. "It hurt him because we incorrectly focused on too small a readership." Kosinski became one of Bantam's steadiest sellers once the house realized that quality is not necessarily at odds with quantity.

In much the same way, prizes are wonderful in pleaseing the authors who win them, but they have little to do with anything else, especially the business of selling books.