JARRATT, VA., JULY 14 -- John Welsch, a blunt-spoken retiree from New York, was still seething today long after he learned that the newest neighbor of this tiny Greensville County town will be the largest penal institution in Virginia history.

Car salesman Russell Sherrick, 30, said he thinks the planned facility -- actually two prisons in one -- may be good for local businesses, especially the Owen Ford dealership that serves as Jarratt's unofficial town hall and official gossip center.

And Ken and Louise Kusaj, a middle-aged couple who run a campground down Rte. 301 a way, were not exactly sure what to think, except to know they were shaken by thoughts of escaped convicts prowling through nearby Otterdam Swamp and onto their 52-acre spread.

"I've never seen a prison yet that had no escapes," said Ken Kusaj. "We'd be the ones to take the brunt."

From Jarratt to the county seat of Emporia and southward eight miles to the North Carolina border, Greensville County residents greeted Gov. Gerald L. Baliles' plan for a new prison here with a mixture of anger, resignation, indifference and, in a few cases, quiet excitement about the potential for some badly needed economic spinoffs from the massive project.

Times are tough in this historic corner of Southside Virginia, despite the presence of Boar's Head Provisions, Frank Perdue chicken processors and the Georgia-Pacific lumber divisions that continue to ply the region's traditional pork, poultry and timber trades.

Greensville is 160 miles and light years away from the likes of Fairfax County, and ranks dead last among Virginia counties for residents' personal income. In 1979, according to the U.S. Census Bureau, the median individual income for the county's 10,000 residents was $3,514. The unemployment rate is consistently 50 percent higher than the statewide average, and one out of every five houses in the county has substandard plumbing.

Statistics such as these have converted many Greensville County residents into supporters of the planned 1,200-bed prison, which state officials promise will generate 750 jobs and an annual payroll of $16 million.

"It's a real opportunity," said County Administrator K. David Whittington. "This prison will sell itself."

Others are by no means as certain.

"There are a lot of positive things connected with it -- the payroll, jobs and general spinoff -- but I can understand why people do not want a prison at their front door," said Peggy Wiley, the county supervisor for the district where the prison is to be built.

"People in Greensville are familiar with prisons," she added. "There's a prison to the west of us, and one to the east of us. So it's not like this is unheard of for this part of the state.

"On the other hand, some people also think we've been dealt our fair share."

For Wiley and the three other supervisors, the prison poses a tough political problem; unlike their counterparts in other jurisdictions, the Greensville supervisors have so far declined to even take a vote on the concept. Wiley said today she was uncertain whether the vote would have any effect on the Baliles administration's decision.

"They couldn't block it, they really couldn't," said state Corrections Director Edward W. Murray. "Greensville contacted us back in 1986 about the prison. We were invited in."

Murray said his department had given sales agreements to the six owners of the 750-acre prison site about two miles south of Jarratt, and expects to soon buy the tract for about $1 million.

Others hope the sale is never consummated.

"They're shoving it down our throats," said Welsch, who works part time at Owen Ford. "Nobody else in the state wanted it, so they come here. To build a prison that big down here is a little bit ridiculous."