Your recent editorial "Where the S&L Billions Go" {July 31} might more aptly have been titled "Where the S&L Billions Have Gone." The benefits from the poorly conceived investments of the savings and loan institutions have gone only to a few.

In your editorial, you took me to task for promoting regional interests over national concerns because of a letter to President Bush that I circulated at the recent National Governors' Association meeting.

No one disputes the fact that the S&L bailout is necessary for the stability of the nation's system, but it is equally clear that the nation's taxpayers will fund nearly all of the hundreds of billions of dollars that the bailout will cost. The cost of the bailout will have tremendous regional impacts that have not been adequately considered.

Any solution to the S&L problem should have as one of its key components a mechanism to ensure that taxpayers realize as high a return as possible from their bailout investment. This could occur through a variety of mechanisms, such as having the Resolution Trust Corp. retain partial ownership in the properties that are sold.

It is these aspects of the S&L situation -- the cost, the regional impacts and the need for an equitable solution -- that trouble me and the 24 governors, Republicans and Democrats, from Alaska and Hawaii in the West to Maine and Maryland in the East, who signed a letter to President Bush, Sen. Robert Byrd (D-W. Va.) and Speaker Tom Foley (D-Wash.) at the recent governors' meeting.

The properties owned by the bankrupt S&Ls that are to be auctioned off, many of which will no doubt yield only cents on the dollar of their original cost, are physical assets that will enhance their state and local economies.

Who can doubt that a house that cost $100,000 to build but sells for $50,000 at auction or a hotel that was constructed for $2 million but is auctioned for $1 million makes that community an attractive place in which to locate a new business? Housing will be cheap, and tourist and business people will find the hotel a low-cost alternative to other lodging and vacation spots. The fire-sale speed at which these properties will be disposed of only serves to magnify the losses to the taxpayers and intensify the interregional economic distortions that the bailout will cause.

The loans that were financed by the bankrupt S&Ls were made by and large to developers in the states and regions in which the savings institutions were located. One need only look at the lists of properties that are to be auctioned to see that nearly all of them are located in only a few states.

The funds that were made available to the failed S&Ls are hard to trace, but it is not likely that massive regional shifts of brokered funds occured. In December 1989, only 6.6 percent of all thrift deposits were brokered funds. Therefore, the argument that the deposit guarantees will benefit Vermonters who invested their funds in failed thrift in Texas is a hollow one.

The bailout will restore the funds of depositors, most of whom live in areas near where the S&Ls are located, and will essentially amount to loan forgiveness on hundreds of billions of dollars of real estate, homes and structures located in the states that harbor most of the failed thrifts.

The other side of this coin is that those areas with few or no foreclosed properties will find that their economic competitiveness will be worsened and job growth will be inhibited. When the Resolution Trust Corp. sells its seized assets at values far below their original cost, it is essentially forgiving the original loan to the developer, homeowner or business person. And loan forgiveness is a powerful tool of economic development. The dollar amount of loans forgiven is 30 times the amount spent annually by the federal government on its economic development for all 50 states.

I firmly believe that preserving the nation's financial structure is of paramount importance. But I also believe that the regional implications of the bailout have been ignored in nearly all the analysis and discussion. These regional impacts will prove in the long run to be as significant to the states as the total dollar cost of the bailout will be to the national economy. Congress and the president must consider the geographical inequities of this issue and develop a method of compensating citizens and taxpayers as fairly and equitably as possible.

-- Madeleine M. Kunin The writer, a Democrat, is governor of Vermont.