TULSA -- Strike up a conversation with any book-loving resident of this uncommonly pleasant city and sooner or later the talk will turn to a small publishing house in which Tulsa takes infectious pride. It is called Council Oak Books, it is six years old, and it is in all respects a remarkable operation, one from which many more eminent houses back in the East could learn some important lessons.

I came to Tulsa last week to talk about the declining state of American literature, but I stayed to be powerfully impressed by what the people at Council Oak are doing to keep it alive. Theirs is a small operation, and they plan to keep it that way; combine this with their location a half-continent away from the center of American publishing, and it's obvious that whatever impression they make will be relatively small. But their commitment to publishing serious work in a serious way is as deep as I've encountered anywhere in a quarter-century of close association with the book industry; along with a few other small houses in other places, they're leading the way into what looks very much like the future of literary publishing.

Council Oak came into being because of the frustrations of Paulette Millichap. She'd written a couple of novels, sent them to the usual places in New York and gotten them back with the usual close-but-no-cigar rejection notices. She was brooding about this one day while exercising when suddenly she stopped in mid-jog, jumped for joy, and shouted, "I'll start my own publishing house!"

The first person she talked to about it was her friend and fellow aspiring writer Sally Dennison, who only recently had completed her PhD in modern literature at the University of Tulsa and, conveniently enough, had written an excellent dissertation -- subsequently published by the University of Iowa Press -- called "(Alternative) Literary Publishing," a study of how T.S. Eliot, James Joyce, Virginia Woolf, Anais Nin and Vladimir Nabokov circumvented traditional routes of commercial publication in order to bring their singularly untraditional work to the attention of serious and receptive readers.

If alternative publishing could be done in London and Paris, why not in Tulsa? Which is why when Millichap asked Dennison to join her, she said, "Why not?" In short order they found a third partner, Michael Hightower; they raised a small amount of venture capital, primarily among family and friends; they bought a personal computer; they gave themselves a name, taking it from "the great oak tree that was the meeting place of {Oklahoma's} early Indian inhabitants"; and in 1985 they brought out their first book.

It wasn't an original, but a new edition of "Prairie City," by Angie Debo, first published by Knopf four decades earlier, a much-admired nonfiction account of the settlement of Oklahoma as shown in a single community's history. It was, as the saying goes, an auspicious debut: 10,000 copies sold to date -- an impressive figure for almost any small-press book, all the more so for a reprint -- and selection by the History Book Club.

Like all Council Oak publications to follow, "Prairie City" was handsomely designed and carefully, indeed lovingly, produced; at the outset the firm's founders had determined that they wanted to publish "intelligent books with honest hearts," and to make the physical books faithful to their contents. But notwithstanding the success of "Prairie City," they did not want Council Oak to be primarily a local or regional publisher; they cast a wider net, and soon began hauling in manuscripts from around the country and beyond.

Now, five years later, Council Oak has nearly 30 books in print and is aiming for an annual average of a dozen. Its list for 1990 includes three additions to "The Brown Bag Series," mystery novels in "unique pocket-sized hardcovers"; a biography of Laura Keene, the noted actress who was onstage at Ford's Theatre the night of Lincoln's assassination; the most recent winner of the National Novella Award, a competition co-sponsored by Council Oak and the Arts and Humanities Council of Tulsa, carrying a $2,500 prize plus publication; and "The Writer in the Catastrophe of Time," a collection of literary essays by the distinguished Argentinian writer Ernesto Sabato.

As yet Council Oak hasn't broken even, though it comes closer each year. In the beginning the partners paid themselves $100 a month apiece; now they receive what is, Dennison says, "a living wage if you're living in a hovel." Along the way they've had, as all new and small businesses do, their ups and downs. The former include sales of 25,000 copies of "Once Upon a Time When We Were Colored," by Clifton Taulbert, a black businessman's memoir of growing up in the segregated South, as well as sales of 27,500 copies of "Cleora's Kitchen," by Cleora Butler, a cookbook that's as wonderful to look at as it is to read.

Speaking of cookbooks, "Mexico's Feasts of Life" gave them their biggest scare to date. This stunningly beautiful book was a major investment (it sells for $39.95) and thus a major risk, but Council Oak decided to go all the way and throw a party in honor of its author, Patricia Quintana, at the 1988 American Booksellers Association meeting in Washington. Two hundred invitations were sent out, but fully a thousand "guests," lured by the Mexican Embassy setting and the prospect of sampling Quintana's food, showed up. "We thought we were going to have to go to work at McDonald's to pay the bills," Millichap says -- but the crisis passed and the cookbook thrived, receiving spectacular reviews and selling 20,000 copies to date.

This and other tales of small-press publication made for an entertaining, instructive luncheon, but what really made me come to attention -- what made me realize that these people are very much out of the ordinary -- was when Millichap said, "We think it takes a year to bring out a book properly." I asked if she meant to edit and design and produce it prior to publication. "No," she said, "We work on a book for at least a year after publication in order to explore all of its possibilities."

I looked at her in amazement. In trade publication few books get any attention from their publishers six weeks after they appear; many are given up for dead before the first copy even reaches the stores. Yet here was a publisher saying in all seriousness that a book would get a full year's worth of sales, promotion, publicity and all the other assistance that books need if they're to stand a chance in an overcrowded marketplace.

Small wonder then that Council Oak, out here in the heart of the heart of the country, is getting submissions from agents and authors all over the place. Not merely is it committed to publishing good books in the best way possible, it's no less committed to staying small enough to give each book the full attention it needs. When its partners say that a dozen books a year are all they want to publish, it's difficult not to believe them; they got into the business for love rather than money, and they seem to be in it for the long haul.

They aren't in it alone. North Point and Sun & Moon in California, Algonquin in North Carolina, Thunder's Mouth in -- yes -- New York: The number of small publishers devoted to serious books is steadily growing. As the big houses grow ever more commercial, the small ones are picking up the slack; more than that, they're bringing new ideas and new energy to a business that's gotten stale and complacent. Out here in Tulsa you can see the future, and it is called Council Oak.