Few Americans have firsthand knowledge of the terror of chemical warfare. But World War I veterans remember the poison gas shells in Flanders and the frantic struggle to put on masks before the deadly fumes drifted into the trenches. There were 1.3 million poison gas casualties -- 91,000 of them fatalities.

The horror of its effects led to the renunciation of poison gas as a weapon of war by most civilized nations -- not so much from moral scruples as from a pragmatic dread of retaliation. As a result, poison gas has been used only on rare occasions, and against enemies of such primitive military capacity that retaliation in kind would have been impossible. In the 1930s, the Italians used gas against Ethiopian tribesmen and the Japanese used it against Chinese guerrillas. In more recent years, the Soviet Union and its allies have rained down poison gas on Laotians, Cambodians, Yemeni rebels and Afghan mountain tribesmen.

Oddly enough, Russia has suffered from poison gas more than any other nation: half a million of those 1.3 million World War I chemical casualties were Russians. Yet the Soviets continue to develop and produce sophisticated chemical weapons -- and to test them on defenseless enemies in remote areas.

Confronted with strong evidence of the Soviets' advances in chemical warfare, Jimmy Carter and his secretary of state, Cyrus Vance, decided that the best way to get them to stop their stockpiling was to set a good example by unilaterally stopping our own efforts.

Chemical weapons development in this country had already been curtailed, following the uproar over an accident at Dugway Proving Ground in Utah. Seeping nerve gas killed 6,000 sheep 30 miles away in March 1968. The next year, President Nixon renounced "first use" of poison gas by the United States, Congress imposed restrictions on open-air testing, and production of new weapons was stopped.

A trickle of money was kept in the Pentagon budget for research and development of "safe" chemical munitions -- so called binary bombs, artillery shells or rocket warheads containig two chemical opponents that are non-lethal separately and are mixed to form nerve gas only after the missile has been fired.

Even that modest effort was too much for Vance and Carter. Their misgivings were spelled out in a revealing, highly classified letter shown to my associate Dale Van Atta. The letter, dated Oct. 23, 1977, was from Vance to Defense Secretary Harold Brown. Vance had spotted the allocation for binary munitions research in the defense budget sent to Congress.

Vance, citing Presidential Directive 15, reminded Brown that Carter had made it "quite clear" that the administration was "striving for the prohibition of not only the production and stockpiling of CW [chemical warfare] munitions, but their development as well."

The secretary of state continued: "In addition, the president has directed that our CW forces be maintained without improvement," meaning no research that might worry the Soviets during disarmament talks. Vance then revealed the administration's naive policy: "I believe that if we were to forgo plans for production we will have achieved a significant psychological advantage over the Soviets. This would force them into the position of having to respond to a U.S. initiative by taking a positive step toward reducing their own CW program."

Unfortunately, the record shows that Carter and Vance misjudged the Soviet reaction to such moral persuasion. Far from rushing to overcome the "significant psychological advantage" by matching the United States' restraint, the Soviets went after a cold, hard military advantage by continuing to upgrade their chemical weapons -- and testing them in combat.

The Reagan administration seems to be leaning toward a stronger "psychological advantage" than Jimmy Carter's good example -- instilling a fear of retaliation if the Soviet Union should unleash its chemical weapons against the United States or its allies.