It is clearly a banner issue. It is also red, white and blue and has stars and stripes. The fact that it does not regularly wave atop the historic Maryland State House is what makes it an issue in the first place.

"Here we are one of the original 13 colonies, one of the original signers of the Constitution. We once housed the capitol of the United States. Our native son, Francis Scott Key, wrote the song about the flag. Our native daughter, Barbara Fritchey, defended it by draping it across her ample bosom. Our people are as patriotic as any in the country, and yet . . ."

And yet, added Del. Charles Blumenthal (D-Prince George's), Maryland is the only state in the union that does not prominently display the American flag on the state Capitol grounds.

Maryland earned that singular distinction several months ago when Afabama Gov. George Wallace ended decades of symbolic resistance by flying the Stars and Stripes along with the Alabama and Confederate flags above the Montgomery, Ala., State House.

"It's a face," said Thomas Smith, a lawyer who works for the legislative reference section of the Maryland General Assembly. "I wrote to every state in the country. Every one of them wrote back telling me that they fly the American flag."

Why the Maryland State House does not fly it, except on seven national holidays, in a question that has spawned controversy and confusion - at least since Blumenthal, a former Army paratrooper, came to town. With the backing of various veteran organizations and Elks clubs around the state, which have made the ussue their number one legislative priority, Blumenthal has sponsored a bill to get the American flag up there where he thinks it belongs.

"There's nothing flaky about this," said Blumenthal, who has been known to draft unusual bills in his eight-year legislative career. But there is something flaky in Blumenthal's story of how he got interested inthe issue.

"One day I was talking with Insurance Commissioner Ed Birrane, a former member of the General Assembly Ed knows about the continuity of things, about how things were before we got here. He told me that about a dozen years ago, on St. Patrick's Day, a group of Irish delegates concluded that night's celebration by climbing up on top of the State House and flying the green flag of the Irish Free State.

"Well, according to the story, that prank was completely abhorrent to the matrons of the Historic Annapolis Society. They saw to it that a statue was passed that said that only the state flag of Maryland shall fly above the State House. The result was that the American flag was not allowed to be up there."

Birrane was not available this week to provide his commentary on the matter.

A variety of other sources said that Blumenthal's historical analysis was half-right, at best. They remembered the St. Patrick's Day prank, but not the furor or legislation that supposedly followed it.

"We had nothing to do with it," said Mrs. J. M. P. Wright, who has been a member of the Historic Annapolis Society for more than 30 years. "We seem to be everybody's whipping boy. People are always trying to blame us for things they don't like."

Carl Everstine, director of the legislative reference office, said the statue regarding the flying of flags at the State House was passed in 1904 and has not been amended since then. "Our records don't confirm Blumenthal's story," he said.

The records do show that Blumenthal made an unsuccessful attempt to get his American flag bill through the Maryland legislature two years ago. It eventually died in Sen. Edward Conroy's Committee on Constitutional and Public Law after the House amended it so that the American flag would fly only when the General Assembly was not in session.