The U.S. Savings League clearly lost its battle to control the shape and size of the recapitalization of the Federal Savings and Loan Insurance Corporation. There is not an objective observer in Washington who would contend otherwise.

Yet, The Post, in its Aug. 9 editorial {"The St Germain Embarrassment"}, slyly attempted to link my guidance of the FSLIC legislation to the lobbying position of the U.S. League. Nothing in the long fight over the legislation supports such an inference.

It is incomprehensible to me that The Post could ignore my floor management of a $15 billion recapitalization plan on Oct. 8, 1986, over the opposition of the league, only to see the House-passed measure die in the final hours of the 99th Congress because the Senate did not act soon enough for the two bodies to confer. It is likewise incomprehensible that The Post ignored my efforts to increase the committee-approved amount of $5 billion to $15 billion. I was defeated by a margin of 153 to 258, again as a result of the ceaseless efforts of the U.S. League.

The Post also failed to report that eight of the 21 Democrats opposed the compromise worked out with the administration, at the urging of the league. It is my recollection that a Post reporter was present at the time this vote was taken.

In view of the foregoing, it is quite clear that the U.S. League bitterly opposed the plan I helped guide through the House and the conference. The league sought to limit the plan to $5 billion, yet we were able to more than double that amount. It sought a sharp diminution of the Federal Home Loan Bank Board's regulatory authority. The conference instead adopted a much more reasoned approach, preserving necessary authority for the FHLBB. Again, the record shows that I supported the conference language in face of lobbying pressure seeking the weakened version.

The final product was supported by an overwhelming majority in both houses and by the administration. Treasury Undersecretary George Gould, who developed the administration's plan and who worked closely with the home loan bank system, knows full well the extent of the U.S. League's opposition. His words thanking me for my efforts contradict The Post's allegations of collusion on my part with the U.S. League: "I know it was not always easy to stand up for more money and less unworkable forbearance, particularly in light of the many intense pressures which come to bear upon the Congress."

How can The Post possibly suggest that all of us are somehow in a conspiracy with the savings and loan lobby -- when the final legislative product is so clearly a defeat for that lobby?

FERNAND J. ST GERMAIN

U.S. Representative (D-R.I.)

Chairman, Committee on Banking,

Finance and Urban Affairs

Washington