AUGUST 1926 was a big month for the Victor Talking Machine Co. They recorded Fred Waring, the Savoy Bearcats and Paul Whiteman, who could be counted on to sell somewhere around a million copies of whatever he cut.

The same month they also recorded four Finnish folk songs by Erik Kivi, who sang old standbys like "Merimiehen valssi" and accompanied himself on a violin reputedly made of toothpicks. He sold 1,069 copies, and his second album sold 652 copies.

What was Victor Talking Machine up to?

Well, apparently the break-even point for a record in those days was about 1,200 copies, and on a light day it paid to keep the pressing machines running. For another thing, ethnic recordings--made commercially and sold back to the groups that were their source--has been a bigger business than you would think.

Up to the '50s, Victor alone made more than 15,000 records by immigrant artists from all over. Even by 1930 the catalogue ranged from Acadian French, Albanian and Annamite to Tonkinese, Turkish and Welsh.

Now the American Folklife Center of the Library of Congress has published a book about them, "Ethnic Recordings in America: A Neglected Heritage." It is basically an account of the center's 1977 conference on the subject, and as such its 269 pages are strong on discographies, alphabetic tables and detailed notes. But it also happens to be a quirky and often absorbingly readable book for anyone interested in the odd bit of information.

"The Beer Barrel Polka," for instance. Boy, there was a smash. Released in about 1935, it started an avalanche, if not a revolution. Jukeboxes were just coming out, a nickel a song (and a dime for 26 ounces of beer), and America was never to be the same again. It was the first big ethnic crossover tune. Even the Andrews Sisters recorded it. You couldn't turn around without someone sweeping you up into a polka. Polka mania went right on into the war (some say it won the war, in fact), and if you are old enough to have heard Arthur Godfrey sing his "Too Fat Polka" once, then you surely heard it 900 times.

The best part of the book is a series of long oral-history reminiscences by people in the ethnic music business. Alvin Sajewski tells the story of his father's music store on Chicago's North Side, opened in 1897 and still going.

"We had two big booths in the store that would hold between 15 and 20 people each, and a long counter . . . When somebody came and asked for numbers, you'd play them . . .

"The hardest part was changing needles for every record. They were steel needles and only good for one record. If you didn't change the needle the man would say, 'Don't give me that one. That's all worn out. I want another one.' You'd just pick up the tone arm and give it a twist and put another needle in there. The machine would be going and you had to wind it up, and sometimes if you got stuck while you were looking for a record, the record that was on the machine would start slowing down -- you had to be able to turn around fast enough to wind up. Because if the customer reached over, I've had it happen that he'd knock the whole machine right off the counter."

Sajewski's index finger grew calloused ridges to fit the little ridges on the needle-head screw.

The pictures are charming too, especially the one of Mrs. Otto Rindlisbacher and her friends playing the Swiss bells on her front lawn in Rice Lake, Wis., in 1941. Everyone is dressed up, and one lady is wearing a hat. The smiles are tentative and not professional at all. It is about as far from the Beatles as you could get.