The scene is an elegant executive office in one of the major publishing houses in New York. A best-selling author and his agent are there, ready and willing to negotiate a windfall deal. Right up front sit the big moneymen to bid for movie rights. Next to them, the people with the lucrative paperback bucks. And slightly off to one side sits Ronald Rothstein, the lone bidder for the toilet paper rights.

All right, so the scenario is hypothetical. Rothstein doesn't really engage in high-powered bidding for the rights to reprint best sellers on toilet paper. He doesn't have to -- he gets at least three or four calls a week from authors and publishers begging him to wrap their words around a cardboard roll and hang them within reach of toilets all over America.

Call if a fad, call it social commentary, call it a bathroom joke if you must, but Rothstein's concept of Bathroom Best Sellers has transcended the level of a mere gag gift and moved his masterpieces from the paperhanger next to the john onto the rack over the kitchen sink as well. Somewhere along the way, it became chic to have Irving Wallace on your bathroom tissue and Craig Claiborne on the paper towels in your kitchen, and Rothstein's fledgling firm, Oh Dawn!, can barely churn the stuff out fast enough to fill the shelves at Bloomingdale's, not to mention the linen closets of celebrities. In 1978, he hit the million-dollar mark in sales, and predicts that 1979's figures will be triple that.

But Rothstein, a lawyer who hardly resembles a purveyor of toilet paper -- even amid the clutter of products at the National Housewares Exposition in Chicago -- did find a few bumps along the road to success. Take for instance, his idea of putting Wallace's "The Book of Lists" into a roll of toilet paper.

"The first person I approached at Bantam loved the idea," Rothstein recalled. "But she said, 'How can I tell someone who has sold 120 million books that we want to put him on a roll of toilet paper?' so the idea hung around in limbo for a while. Finally, we approached David Wallechinsky (Wallace's son and coauthor of the book), and we had a contract within a week."

But Rothstein credits his inspiration to a joke and his eventual breakthrough to an earlier encounter at Bloomingdales.

"About six years ago someone gave me a roll of toilet paper stamped with dollar bills. It was sleazy stuff that came from a dirty little shop down on 42nd Street in New York, but it started me thinking that a high-class version might catch on."

His original foray was a takeoff of the Gucci design, with a pair of C's instead of G's, which never raised him to the department store level he was striving for and landed him in court with a lawsuit besides. Once that was settled, he set out to convince Bloomingdale's that a roll of toilet paper carrying the store's insignia would be a really great gift item.

"The buyer I showed it to simply didn't have the nerve to take the order, and we had to call in a senior vice president to approve it. But once we broke into Bloomingdale's it was easier to convince everybody else that there was nothing demeaning in the concept."

So Rothstein hired a marketing firm to find out how many Americans are secret water-closet readers and just what it is they want to take with them into the powder room. The answer, he swears, is that 8 out of 10 people find the bathroom a congenial place for reading, and what they want to take in there is the cream of the best-seller list.

"We don't do schlock stuff," he says repeatedly. "You won't find Richard Nixon or the ayatollah's faces on Oh Dawn! toliet paper. There is nothing insulting in our approach; there are no negative connotations," he maintains, despite the evenutal use for which the tissue is intended.

So far, Rothstein has filled the bathrooms of America with "The Book of Lists," "The People's Almanac 2," "The Experts Crossword Puzzle Book," and "The Dieter's Guide to Weight Loss During Sex." In the kitchen, you'll find sloppy cooks wiping up messes with "Mary Ellen's Best of Helpful Hints." "The New York Times Cookbook," and "James Beard's American Cookery," as well as the ever-popular "Dieter's Guide." New offerings are an original Incredible Hulk comic strip on toilet paper and facial tissue with Hulk and Spiderman strips, and with Superman and Wonder Woman insignias, the latter of which are expected to be big sellers around Father's Day and Mother's Day, respectively. New entries will be "Murphy's Law," and the "Book of Lists II," and Rothstein is hot on the trail of Erma Bombeck -- "a natural," he says.

In trying to put only the best in front of those who peruse in the bathroom, Rothstein points out that he also uses only the finest hypo-allergenic paper and nonbleeding ink, which will assuage the fears of sensitive readers. The toilet paper retails for about $3 a roll, the paper towels for about $5.