"ORATOR JIM" O'ROURKE was so furious at the Boston Beaneaters for being too cheap to pay for his uniform that he jumped the team and signed with Providence.

That is how baseball's reserve clause was born 99 years ago - over the price of one uniform. The clause bound a player for the duration of his career to the team which first signed him or later obtained him by trade; without it, defenders claimed, clubs and no incentive to develop new players, since wealthy clubs would buy up the best talent.

Since then, players have been sold for as little as 25 cents and traded for a bulldog, a bird dog, a turkey, an airplane - until at last the reserve clause itself has been drastically modified into a shell of its old self.

Yet the consequences feared by club owners have not materialized. In fact, the effects in many instances have been the opposite of those anticipated:

The flow of talent has been in the wrong direction: from rich to not-so-rich.

Far more teams than expected have been willing to offer million-dollar contracts, often to players who will only get into the Hall of Fame with a ticket.

Supposedly ugly duckling cities like Milwaukee, Montreal and Cleveland have signed more free agents than the New York Mets or Los Angeles Dodgers.

While the game's salary structure has been wrenched out of shape even more than many feared, its competitive balance and drawing power have actually improved.

Instead of dismay, the public has greeted this mad, mad world with delight, changing its loyalties and rooting interests as fast as the ink on a check could dry.

The casualty of the free agent wars may be the minor leagues and not the majors. And, in the end, that may prove an unexpected financial blessing for the game.

All this suggests that a lot of time and energy have been wasted in the courts, Congress and elsewhere in the long debate over baseball's system of benevolent peonage. Passing the Buck

FROM THE Federal Baseball case of 1922 to Toolson in 1953, to Flood v. Kuhn in 1972, the judiciary has tried in vain to digest this perplexing quasi-legal cornerstone of the game.

The Supreme Court, when asked to arbitrate, did something no umpire would consider: It turned its eyes away - three times - handing down narrowly legalistic, hands-off nondecisions. The question of the reserve clause never was truly judged on its merits.

The Federal Baseball decision, which ruled that baseball was not trade or commerce but a sport, has been referred to as the day Oliver Wendell Holmes went 0 for 4.

"Not one of Justice Holmes' happiest days," wrote one judge. "A case that has been left nothing but an impotent zombie by subsequent Supreme Court decisions," wrote another.

Yet that zombie haunted the game for half a century.

In Toolson and Flood the court either clung to a strict application of precedent or argued that decades of congressional silence on the "baseball issue" were tantamount to legislative approval of the initial court ruling in 1972.

In lay terms, the Court said:

We have a precedent for exempting baseball from anti-trust law and we're not going to overturn it.

It's Congress' job to pass special legislation regarding baseball if it thinks it's necessary.

Congress immediately tossed the ball back to the court.

"Legislation is not necessary until the reasonableness of ithe reserve ruleshas been tested by the courts," concluded the voluminous, inconclusive Celler Report on Organized Baseball in 1952.

Arbitrator's Ruling

THE FAILURE of the courts to make decisions based on the merits of the dispute meant that litigants would turn to a nonjudicial resolution: collective bargaining.

And in that more free-wheeling forum, the reserve clause was totally smashed in one unanticipated instant.

A labor arbitrator, Peter Seitz, claimed that the collective bargaining basic agreement between owners and the Players Association idd not mean what everyone thought it had for years.

Seitz readily admitted that his decision in the 1975 Messersmith-McNally case was based on close reading of vague fine print rather than choosing between substantive arguments. He ruled that the basic agreement, as written, did not include any year-after-year reserve clause at all.

Because of the "careless wording" of the owners' portion of the agreement, every baseball player could "play out his option years" at any time and could become a total "free agent" by the subsequent season and put himself up for public auction to the highest bidder.

Andy Messersmith was the first liberated ballplayer since Orator O'Rourke. Messersmith's immediate open market value: $1 million.

Seitz, who was fired within hours by the owners, claimed that his lighting-bolt decision "strikes no blow emancipating players. . . . It does not condemn the reserve system nor require that the system be changed to suit the preferences of an arbitrator acting as philosopher-king imposing his own personal brand of industrial justice."

Surely Seitz' tongue was in his cheek. Even the Players Association feared that, without any reserve clause, the game would lurch from chaos to bankrupcy.

By midseason of 1976 the owners, over a barrel, agreed to an enormously modified reserve system in a new 4-year basic agreement.

Its central feature was that every player in organized baseball would, when his current contract expired, be eligible to declare himself a free agent on a one-time-only basis.

In the future, on the other hand, any player could exercise his "option year" after he had been employed by one club for six seasons.

Henceforth, assuming the agreement is extended in 1980, every player's career theoretically will be divided approximately in half.

The club that drafts and signs him will control him for six seasons, plus an option year. Then a player can test his open market value and change teams if he desires. Unexpected Developments

ALMOST EVERY aspect of the aftermath of the Seitz ruling and the subsequent basic agreement of '76 have come as a surprise to those closest to baseball.

The principal defense of the reserve clause system has always been that without it the wealthiest clubs would hire all the best players, thereby ruining the balanced competition necessary to a prosperous league.

Nevertheless, baseball apparently has prospered in the early stages of the post-reserve clause period. The so-called Crushing Dynasty Theory, put forth by owners from the 1870s to the Flood and Messersmith cases of the 1970s, has fared extremely poorly.

This theory holds that, without the reserve clause, a wealthy club could dominate its league, not just for 2 or 3 years but possibly for decades, by signing the most talented players.

In the 1976 free agent draft, the first 10 "million-dollar" players to sign all went to teams with worse records than the ones they left.

Only Reggie Jackson, who moved from Baltimore to the New York Yankees, went to a higher-ranking team.

"Wait until next year" was the general wisdom, even among worried fans. Yet the same thing happened again. The top free agents migrated slightly downward in the standings, or moved from one noncontender to another.

The Yankees' studiest pitcher, Mike Torrez, defected to archrival Boston for $2 million. In desperation, New York tried to recoup by signing free agent Goose Gossage, the National League's top relief pitcher, for $1.5 million. Even after the Yanks bought three more once-good but now old-or-injured players - Messersmith, Rawley Eastwick and Jim Spencer - they still seemed to have ended up slightly weakened.

In the American League's western division, the Kansas City Royals were dominant in 1977. Immediately, the Texas Rangers and California Angels, the two teams with the best chances to challenge the Royals, bought just the players they needed to excite their supporters and to even up that division's competitive balance - Richie Zisk and Lyman Bostock, respectively.

Many examples from the 1976 and 1977 drafts can be listed. But the trend is clear: Tail-end teams like California, Milwaukee, Montreal, Cleveland, Texas, Atlanta and San Diego have all offered multi-year, million-dollar contracts to lure stars (or borderline stars) away from winning teams. Unrealized Fear

WHAT BASEBALL had feared for a century - universal freedom to shop around - has come and gone. And, at least on the score of competitive balance, the sport has been strengthened and invigorated.

In the future, free agents will be a rare breed, a few each year of top quality.

"Losing teams know these free agents are like a vein of gold in the ground," said Milwaukee general manager Harry Dalton. "Unless your team is an absolute economic disaster, you're going to take the risk and go prospecting."

Baltimore general manager Hank Peters, one who has abstained from "chasing the high rollers," calls this process the Law of Increasing Desperation. "With each free agent who signs," he maintains, "the other clubs get increasingly desperate to get one that is left."

Pershaps the most prescient commentators on the inaccuracies on the Crushing Dynasty Theory were two Brookings Institution economists, Roger Noll and Benjamin Okner, who testified before a Senate Antitrust Subcommitee in 1971.

"All other things being equal," they said, "a good player is worth more to a poor team than a rich one . . . the first good player added to the roster of an inferior team will have a greater impact on team revenues than adding another star to an already star-studded team."

Therefore, mediocre and even losing teams will always have a sound economic interest in bidding competitively for one or two outstanding players to change their fortunes.

"It is possible in the case of some cities to improve your team by spending on long-teamd contracts, while getting that money back at the gate rather quickly," said Dalton, who was general manager of the California Angels in 1977.

"We spent over $5 million on free agents, yet we lost 88 games last year, largely because of a wave of injuries. But despite our record, our attendance was up 41 percent. That shows other teams the interest that new players create."

Obviously, players recognize the other side of this coin: that their services may be worth more to a lesser team. Eroding Talents

BASEBALL HAS argued that wealthy teams in "glamor" cities would stockpile good players for the future.

Now contrary reality appears to be almost undeniable: A baseball player would perfer to perform every day for less money, rather than do nothing for more.

To sit on the bench is not only a personal affront, but a waste of talents which the player knows will erode quickly with age. Few athletes want to sit on the bench for a top team, even if they are making $50,000 a year.

Why? Because almost all are convinced that if they could play every day they would make twice that much as standouts for other, lesser teams.

Already, promising minor leauge players like Steve Henderson and Ray Knight of the overstocked Cincinnati Reds have used the threat of free agent leverage to spur trades to losing teams and thus extricate themselves from the long shadows of George Foster and Pete Rose.

Ten years from now, Henderson and Knight will still be at their peak in other cities while Foster and Rose are Cincinnati memories.

It is not farfetched to speculate that in future years more promising players will migrate more freely among teams, so that less talent will molder on the bench and more teams will have sound starters.

The Baltimore Orioles, Chicago White Sox and Chicago Cubs were perfect examples of this in 1977.

All three teams were built either on rookies or unhealded free agents who believed in themselves and risked playing out their options in order to gamble on getting more playing time for new teams. And all three clubs were in first place in their divisions as late as August. Fans Want a Winner

THIS MASSIVE shuffling of personnel - more pronounced in the last three off-seasons that at any time in baseball history - bring up a second century-old argument for a reserve system:

Without some restraint on player transactions, won't public confidence in the integrity and continuity of teams be destroyed? Chaos will follow, baseball long has claimed.

"Maybe we are killing ourselves in the long run," said a Boston front office official, "but right now there seem to be more pluses in free-agentry than anyone guessed.

"Our fans don't seem to care at all about loyalty or keeping one player for 20 years. They just want us to win. They're as excited about getting a Bill Campbell or a Mike Torrez as college fans would be about a new hotshot freshman recuit. College fans stay loyal, even though no player stays more than 4 years. Our rate of turnover will never approach theirs."

In each of the last three off-seasons, between 10 and 11 percent of all the players in baseball have changed teams between the end of the World Series and Christmas. Minor League Costs

ANOTHER ENORMOUS side effect of free agentry - one which is still unclear - may be the demise of the extensive lower minor leagues.

"In many ways the minor leagues have already become a myth," says George Steinbrenner, president of the Yankees. "College baseball is the future of the game. It may be the solution to our financial crisis."

Baseball always has emphasized that its player development costs far surpass any other sport's. In Food v. Kuhn , the respondents pointed out in their brief to the court that major league expenses for minor league operations from 1963 to 1967 totaled $118 million.

That broke down to roughly $1 million per club per year, or 25 percent of total club operating expenses. During that period teams spent an average of $316,000 for each player brought up. The Boston Red Sox state their development costs per player are now up to a half million dollars for each major leaguer produced.

In 1949, the nation was speckled with 475 minor league teams. "There are only 120 teams today," points out an assistant to Kuhn.

College baseball, which gets no major league subsidy, had 13,350 junior college players in 1977 and 23,975 in 4-year programs. "It is one of the best-kept secrets in sports," boasts commissioner kuhn, "that 67 percent of the players on major league rosters last year had attended college (and played there)."

If Steinbrenner had his way, each team would have only two farm teams, one for college players a step away from the majors and one for high school signees.

Another concept, called "hothouse baseball," would wipe out all minor leagues except 26 teams at the highest, of AAA, level. All players below that level would remain in the parent club's spring training complex and concentrate on intrasquad games, drills, batting and pitching practice.

For decades, baseball argued that the reserve system should be kept because without it, the minor leagues would be crippled - because no team would spend large sums to produce players it could not be certain it could keep. Now many baseball men say that the new basic agreement will help a necessary process of winnowing the minors and finding ways to channel funds into college baseball.

When teams like the California Angels look at a farm system that operated $1.5 million in the red in 1976, it is easy to see why many agree with Steinbrenner when he says, "The majors could contribute $5 million, or even much more, to an NCAA baseball scholarship fund and still come out far better off." The Salary Issue.

IT IS OOD THAT the single justification for the reserve clause which now seems most cogent - plain old salary restraint - is the one which organized baseball always played down, and mentioned last, on its visits to Congress and the Supreme Court.

Owners knew that their case looked weak. Baseball's own economic expert witness, John Clark, testified in the Flood case that the compensation paid to players has been a declining percentage of the industry's expenses. Front office expenses in fact, had increased three times faster.

Players' salaries were 35.3 percent of major league expenses in 1929, 28.9 in 1943, 24.8 in 1946, 22.1 in 1950 and 19.20 percent in 1970. At the time of Flood , the average major league earned only $44,090 over his full 5-year career (including minor league seasons).

Today, however, with players like Bostock, Jackson, Gatfish Hunter and a dozen others signing multi-year contracts for $2 to $3 million each, the economic stability of the game is tied to the salary structure of the players more than it has been since the 1860s and '70s.

"The entire salary structure of the game is still climbing," says Baltimore's Peters. "Even subs haven't signed their contracts yet. They want to see just how crazy it's going to get. Second-line free agents are waiting until the big names are gone, because they know there are still teams who are determined just to show their fans a new body."

Baseball has always done a consummate job of disguising the state of its corporate health. Most franchises are part of larger financial empires, often being used as tax writeoff because of the laws allowing players to be regarded as property which depreciates.

Nevertheless, one thing is indisputable to the historian of sports law: "Salary restraint" - the one reason for insisting on the reserve clause which baseball always said was least important, almost peripheral - has in the 1970s become the game's central question.

The Philadelphia Phillies' payroll reached $139,000 per player in 1977, while the expansion Toronto Blue Jays paid $34,000.

That is, almost by definition, the picture of a sport - or business - in the midst of truly violent transition.