"Oh, dear, that one is a loser," lamented a woman who had just paid $35 for a grab bag of four rundown Timex men's watches.

It was a great day for an auction for more than 1,000 bargain hunters attending a D.C. police auction yesterday of 3,500 unclaimed lost and stolen goods.

What should have been a field day for shoppers became a gold mine for the city's treasury as shoppers got carried away by the excitement of the bidding. By early last evening, more than 2,300 items had been sold and $70,000 raised for the city -- in cash or certified checks.

Fifty-nine-cent cans of corned beef sold for $3 each. A 1977 Honda sold for $1,900. A shopper bought six pairs of new leather shoes for $57. Two pair fit. He said he would give the others to family members.

Ann Douglas, a registered nurse at D.C. General Hospital, said she watched a friend pay $50 for a used black-and-white television set that would retail for $65.

"The people are just going berserk!" said Douglas.

Throughout the day people with infants riding on their hips or children in tow paid $2 admission to the hot, sticky D.C. Armory. The atmosphere was festive. Buyers and onlookers stood in tight groups ogling the merchandise or sat on plastic chairs around one of six auction blocks.

Items being auctioned included cameras, bicycles, mopeds, stereo equipment, tape decks, tires, carrying cases for weapons, clothes and power tools.

D.C. Police Chief Burtell Jefferson sat with friends enjoying the action on a block lined with dozens of 10-speed bicycles and mopeds.

"Now that thing is going to sell for $400," the chief told a friend and pointed to a pastel-colored moped up for bid. Seconds later the bike sold for $390.

"See. I told you," he chuckled.

"We hope to make a pretty nice dollar for the District," Jefferson said. "The sales have been running much higher than we anticipated."

Jefferson attributed the high bids to emotionalism.

"It's a personal thing between the people," he said. "It has become a bidding war rather than what they feel the value of the product actually is."

"I think the people are overbidding, but I'm having a nice time," said Ruth Harris, a District resident attending her first auction.

Another District resident, Shirley Wright, said her mother made a special trip from Philadelphia to attend the auction.

Some savvy shoppers came away with good deals.

Mickey Tabron, a computer technician from Oxon Hill, paid $17 for two automobile tape decks and a JVC speaker.

A 1978 Buick sold for $3,100 and an MG sports car for $3,300.

Gene Brown, a D.C. police officer paid $36 for a Black and Decker power drill.

"I'm enjoying myself," he said, hugging his purchase.

Meanwhile, in the background the bicycle auctioneer was hawking a Fuji 10-speed bicycle.

"Give me $100 for the Fuji," he cried.

"No," the crowd roared back good naturedly.

Seconds late the bike sold for $130. CAPTION: Picture, Man holds up item for view of crowd at D.C. police auction of unclaimed lost or stolen goods, which raised more than $70,000. Auctioneer at microphone takes the bids. By James A. Parcell -- The Washington Post