One likes to think that America stands for right and truth, honor and justice. However, the state of Maryland, in its handling of the Old Court Savings and Loan collapse, is making a mockery of those words. Apparently, Maryland prefers to stand for greed, dishonesty and corruption.

To the people who think they are not involved in the Old Court debacle, let me remind them: at the moment, Old Court depositors are being betrayed by the state of Maryland. But who will be next? What other bonds of trust will be broken between government and citizen? No citizen can claim that his status is not diminished by the unfair treatment of his fellow man.

It is shocking that the state is unwilling to stand behind the depositors from one of its financial institutions, an institution supposedly backed by a state-mandated insurance corporation. Granted the principals of the savings and loan committed criminal deeds. But banking is a regulated industry. The state has laws and oversight procedures to protect depositors. Not only did Maryland fail to do that, it is now reneging on its duty to repay the depositors the money they have lost.

Without the Maryland Deposit Insurance Fund, Old Court would have had no credibility. Yet Maryland is now refusing to accept its responsibility in backing the depositors who have lost their life savings. It is sending the message that any state-legislated institution is only a house of cards, that the word of the state means nothing. I am ashamed for Maryland's short-sightedness. By mishandling the payout, Maryland becomes an accessory to the crime.

We depositors have no political power, and so it is easy to ride roughshod over our rights in the interest of politics. After this debacle, we depositors have no money. We worked for our savings, paid taxes, played by the rules. If the state government doesn't play by the rules and protect us, where does that leave government of law and order? Can people respect a government that sells its citizens down the river?

I submit to you that no citizen in the land is safe if the government is not trustworthy. The MDIF has a moral obligation, an ethical obligation, to fulfill its purpose. That purpose was the protection of depositors. Why should the depositors, who did nothing wrong except to put their faith in that protection, now be punished?

K. T. ANDERS New York City