Elizabeth Kane's life seems as wholesome and middl American as a church picnic. At 37, the Midwestern homemaker is maried to an executive, loves gourmet cooking and has three children -- with another on the way.

The baby she is carrying, however, is not her husband's. Seven months ago, Kane conceived the child of a man she has never met and became one of the first women to publicly announce her role as a "surrogate mother."

When she delivers in November, she will hand over the baby to its father and his infertile wife in exchange for a fee that she will only say "is less than $10,000."

Kane's child will be the first baby born through Surrogate Parenting Associates, Inc. (SPA) in Louisville, ky., which expects to be responsible for 100 more biths within a year after Kane (a pseudonym she uses for media contacts) has her child.

Founded in January by infertility specialist Dr. Richard Levin, 35, and attorney Katie Brophy, 25, SPA claims to have "institutionalized" the controversail practice of matching up infertile couples with fertile women willing to bear them a baby.

"People have been doing this privately for years," says Brophy. Inspiration, she conjectures, may be the Biblical tale of a barren Sarah sending Abraham to conceive a child through her handmaiden Hagar.

"A woman will bear a child for an infertile friend or relative -- conceiving through intercourse or artificial inseminatioin. One woman inseminated herself after reading a medical article in Reader's Digest and bore her friends a baby -- even though she was still a virgin."

But such casual arrangements, says Brophy, "are wide open for abuse. What if the surrogate starts hounding the couple, or tries to reclaim the baby or give birth to a child with a defect?"

SPA seeks to overcome nearly any possible problem by a thorough screening and strict contract for both the surrogate and the couple. The surrogate must be married and have borne at least one healthy child, pass a battery of medical and psychological tests, agree to terminate her parental rights and abstain from tobacco, alcohol and drugs during pregnancy.

Her husband also must agree to the arrangement and be examined by a psychiatrist. The surrogates set there own fees, says Brophy "usually anywhere from $3,000 to $10,000."

The average cost for the "expectant parents" -- who pay the surrogate's medical and transportation expenses to Kentucky for the insemination performed by Dr. Levin -- totals from about $13,000 to $20,000.

Despite some criticism by those who consider surrogate parenting a shocking form of genetic engineeeing, Dr. Levin calls it "the logical counterpart to donor insemination -- which has been practices for years to help couples when the husband is infertile.

"I don't think what we're doing is any more remarkable than the first blood transfusion or the first heart transplant. But people get a little more excited when a procedure deals with reproduction or sex.

"About 15 percent of couples have infertility problems, and many become extremely distressed about their inability to have a child. Adoption waiting lists run from five to seven years for a healthy white infant."

Levin concedes that couples probably could adopt an older or handicapped child, or one of another race. "But these people want a child related to them, who will carry on their bloodline. The women often say, 'I want my husband's baby even if someone else carries it.'"

Another person often identified with the increasingly talked-about phenomenon is Michigan attorney Noel Keane, 41. Like Levin, Keane became involved with surrogate parenting when a distraught, childless couple came to him for help.

For a $3,000 fee, Keane finds a surrogate for a couple -- usually through a classified ad -- and arranges for the adoption. But because Michigan (like most states) prohibits paying for adoption, Keane's surrogates are not paid.

(The exceptions are those who agree to bear children for single men: It is unnecessary for a man to adopt his own child, and there is no wife involved. In an ad for such a surrogate one of Keane's clients offered to pay $10,000, plus expenses.)

"It's a giant, giant thing," says Keane, who is writing a book about his practice and, like Levin, has become a TV talk-show regular. "We've had five babies delivered, five pregnancies presently, and I'm working with another 15 or so couples.

"I see it not only as a service to infertile couples, but as a way for a man to have a child. A woman can go out and have a child any time she wants. Now a man can, too. And if he prefers to have a boy, there's a 75 to 85 percent probability we can arrange it by separating the sperm before insemination."

Unlike Levin, who prohibits the couple from meeting the surrogate and performs the insemination himself, Keane encourages couples to meet and make their own arrangements for insemination. "There are now doctors willing to do this," he says, but at first some couples performed "do-it-yourself" inseminations.

"It's simple," says Carol Pavek, 26, a Texas midwife who wrote Keane asking to be a surrogate after she saw him on a TV show. "He told me about a couple in California who wanted a child. I talked to them over the phone and they got on the bus to my house the next day.

"I went to the drug store and bought a syringe. They went into another room, and, after a little while, the wife brought me her husband's sperm in a paper cup . . . I know she wanted to have some part in the conception and make it the result of a loving act between them.

"She stayed and talked with me while I inseminated myself. They are terrific people, although I must admit I was a little uncomfortable with the husband. We sort of forced ourselves to talk to each other.

"That insemination didn't work, so I went out to their home, tried again and it worked. That was May, just three months after I'd written Noel, and I was pregnant."

"It was really neat getting to know each other," agrees the California woman, who after bearing two children had a hysterectomy. When she remarried, "I felt so bad that I couldn't give my husband a child -- but now I can.

"I don't feel like I'm pregnant, but I do feel like I'm expecting. It's my baby, and I don't see anything wrong with it. After all, when a man donates semen for artifical insemination no one blinks an eye."

Why is Pavek a surrogate? "I wanted to have a child again and do it right this time -- at home." She insisted the father be under 6 feet, to increase the chances of a baby small enough for a home birth.

"As a midwife I'm always talking about home birth, but with my son I ended up in a hospital. I wanted to try it again, but we can't afford another baby. I'm not saying it's going to be easy to give the baby up. But I'm purposely not picking out names, or looking at baby clothes and layettes."

Her husband Rick, a computer operator, says he's pleased his wife "is able to do something she want to that will help other people. It sometimes gets in the way of our own family life, but it's just like a normal pregnancy -- only it's someone eles's child.

"I sort of look at it as her hobby or part of her profession -- like special training for being a midwife. I guess I'm sort of amazed we're doing something considered a newsworthy thing.

"Mentally, I'm preparing myself against her changing her mind about giving up the baby. If she does, I'll slap her hand and tell her to give it over."

Pavek says the only reason she's comfortable with the thought of giving her baby to the California couple "is because I met them. I'll have the baby for a week, to breastfeed, because that's so important to an infant's health. My fantasy is getting a card from them every Christmas. But I'd never give away my baby to strangers."

In contrast, Elizabeth Kane says she's "glad Dr. Levin prohibits us from meeting. I have no desire to meet the couple -- it's their baby."

Kane cites "Christian love" as "sisterhood" as her reasons for becoming a surrogate. "It's something I've wante to do for years," she says quietly. "I have two relatives and know about six couples who are infertile. I've seen their heartbreaks.

"I've spent most of my married life worrying about not being pregnant, and whenever I've gotten pregnant I feel so guilty telling those people."

So when she saw a newspaper article about Dr. Levin's surrogate search, Kane felt "incredibly excited". Her children also thought "it would be neat," but her "super-conservative 45-year-old" husband wasn't so enthusiastic. n

"The first thing he said was "My wife's not going to have another man's baby'. But we talked about it a lot -- for about four days.

"Up until this point I'd been a very submissive wife. I reminded him how I'd supported him in everything he ever wanted to do. He finally realized it was something very important to me, checked out Dr. Levin, then said 'I thing you're crazy, but I love you and I'll support you.'"

Although her husband's worst fears come true -- "He lost his job, my mother won't speak to me and neither will a lot of our friends" -- Kane says, "I feel good about the whole thing.

"I consider it a very Christian thing to do -- to help other people. When I first heard I'd have to make money I was upset because I wanted to do it for love. But my husband and Dr. Levin convinced me, to make it legal, I should accept the money."

Kane's biggest problem, she admits, is loneliness. Her husband's new job (at lower pay and status) requires that he travel a great deal; her mother has talked to her only once, and several friends have cut her off.

"When the baby first kicked I was so excited, but there was no one to really share it with. When I found out it was a boy (through amniocentesis) dr. Levin set up a telephone conference call with the couple and that was nice.

"We were all very nervous, but it was good to hear how excited they are. They'll be in the delivery room (but will remain anonymous, wearing gowns and masks). I want them to see their baby born. I asked my husband if he would be there, too, and he said he'd rather not.

"But it's worth it. I feel I'm giving childess people new hope and I guess I'm doing it for all the infertile couples in the world. Someone has to start it. And it might as well be me."