Documents uncovered in a series of recent lawsuits indicate that for more than three decades the nation's largest asbestos companies hid evidence about potentially fatal effects of asbestos exposure on millions of U.S. workers.

The documents are being widely circulated among attorneys involved in the rapidly increasing number of so-called "white-lung" lawsuits against asbestos manufacturers. The number of such suits has climbed from only a handful five years ago to more than 1,000 today, with total claims by asbestos disease victims against industry totaling more than $2 billion.

Earlier this year federal cancer experts added fuel to the asbestos controversy by linking asbestos to as much as 18 percent of all cancer cases expected in the country over the next few decades. Asbestos cancers are the result of exposure to the carcinogen 20 or 30 years in the past, according to medical experts.

"These files are going to be the Pentagon Papers of the asbestos industry," said Barry Castleman, a consultant to the Environmental Defense Fund and to attorneys who have been distributing the material through legal circles.

The documents - internal memoranda and files and sworn statements from several former asbestos industry officials - go back to the early 1930s.

The documents and statements sharply contradict claims by major asbestos manufacturers that they did not learn of asbestos danger to workers and others until publication of a study on the subject by a team of researchers from Mt. Sinai Hospital in New York City in 1964.

Among the material that has become available through the legal proceedings:

Letters and files going back to 1934 from two of the biggest asbestos firms, Johns-Manville and Raybestos-Manhattan, noting efforts by senior executives of those companies to suppress information about the potential harm to workers from asbestos. The papers also indicate that the executives were allowed to edit out or tone down references to asbestos-caused disease in industry-supported research studies.Both companies deny they suppressed asbestos information.

Documents and statements from former asbestos officials that the industry spent thousands of dollars setting up research projects at a Saranac Lake, N.Y., laboratory in the 1930s and 1940s and then prevented the researchers from publishing findings indicating possible asbestos danger to humans.

Documents indicating that another large asbestos manufacturer, the Philip Carey Co., ignored warnings from the firm's own medical consultant about the danger of asbestos and then dropped him as a consultant after he warned of possible lawsuits from asbestos-exposed workers.

Corporate files showing that asbestos companies quietly settled injury and death claims from workers who handled asbestos products years before the companies and the asbestos industry acknowledged that asbestos could cause serious harm to workers.

Additional files and testimony from former asbestos officials that Johns-Manville, the nation's largest asbestos manufacturer, apparently maintained a policy into the 1970s of not telling its employes that their physical examinations showed signs of asbestosis. The policy was maintained despite the industry's acknowledgement years earlier of the danger of the disease and despite the awareness by company executives that it is progressive and fatal unless caught and treated in its early stages.

Many of the documents were turned over last month to a House Education and Labor subcommittee looking into the white-lung problem. The panel held hearings in California on proposed legislation that would compensate asbestos victims or their families from public as well as private funds.

"There is no question about the significance of this material," said Ron Motley, a South Carolina attorney who is handling some 350 asbestos cases against manufacturers and others.

"Until now," he said, "we have been fighting our lawsuits on the grounds of what industry should have known and done. Now we know what they knew and did, and that was to try to put a lid on the whole thing and keep on making money."

Some asbestos industry critics have estimated that the manufacturers and distributors of the fiberous mineral have netted $1 billion since 1938. In a lawsuit filed against 15 large asbestos manufacturers last month, attorneys for 5,000 West Coast shipyard workers demanded $1 billion in damages, citing the new material as evidence of an industry conspiracy to tamper with and hide information about the danger of asbestos to workers.

In a series of recent interviews, atneys handling asbestos lawsuits around the country said the newly developed material is likely to bolster torneys handling asbestos lawsuits efforts to circumvent traditionally claim procedures.

Most asbestos manufacturers are reluctant to discuss the documents or their potential legal significance, citing the number of lawsuits piling up over the asbestos issue.

"We have taken the position that we will be tried in the courts and not in the press," said Robert Sims, an attorney for the Raybestos-Manhattan Co. So far, he said, his firm has been hit with nearly 700 lawsuits from asbestos victims.

Other industry officials have questioned whether the documents, which have never been presented to a jury, will be effective evidence. "I don't think they constitute any evidence of any effort on the part of John-Manville to withhold relevent information or ruppress the development of scientific and medical knowledge," said Dennis Markusson, the attorney for the Denver-based asbestos manufacturer.

In the only court test of the new material, the asbestos industry suffered what some critics claim is a significant setback.

That took place in August when South Carolina Circuit Court Judge James Price ordered a new trial for the family of a deceased asbestos insullation worker. A jury ruled against the family's claim that they were entitled to damages from 10 asbestos firms in April, but Price ordered the new trial after Motley, who represented the worker's family, came up with some of the corporate files in New Jersey.

The judge set the new trial - the asbestos firms are appealing the ruling - after reading the documents and ruling that they were likely to change the jury's verdict.

In his ruling, Price noted that Raybestos-Manhattan and John-Manville "exercised an editorial prerogative" over scientific work they funded.

Further the judge concluded, the documents, which were obtained from Raybestos-Manhattan's files during an asbestos lawsuit, reflected "a conscious effort by the industry in the 1930s to downplay, or arguably surpress, the dissemination of information to employes and the public for fear of the promotion of lawsuits."

Most significant among the files are letters during the 1930s and 1940s between Raybestos president Sumner Simpson and Johns-Manville attorney Vandiver Brown as well as letters between Simpson and the trade publication Asbestos.

In one 1935 letter an Asbestos editor asked permission of Simpson to publish an article on asbestosis, which had been studied and found harmful to workers in england but whose danger in the United States was being played down at the time by the U.S. asbestos industry.

"Always you have requested that for certain obvious reasons we publish nothing" about asbestosis, the Asbestos editor wrote. "And naturally," she continued, "Your wishes have been respected."

Five days later, in a letter to Brown, Simpson noted that Asbestos had been "very decent" in the past about not running British articles on asbestosis. "I think," he said, "the less said about asbestos the better off we are."

Brown replied in writing: "I quite agree with you that our interests are best served by having asbestosis receive a minimum of publicity."

In 1933, according to the documents, the industry became concerned over reports of worker lung damage from exposure to asbestos. Asbestos executives went to Dr. Anthony J. Lanza, a former U.S. public health official and assistant medical director of the Metropolitan Life Insurance Co., which held much of the asbestos industry's occupational claim insurance.

The documents obtained from Raybestos-Manhattan note that Lanza did a study for the asbestos industry on asbestos and lung damage and, in 1934, gave it to Brown and another industry attorney, George S. Hobart, for a critique before publication. The attorneys asked that Lanza soften his assessment of the dangers of asbestosis, which was then being considered by New Jersey for inclusion on its list of compensable diseases.

"No one in our organization is suggesting for a moment that you alter by one jot or tittle any scientific facts or inevitable conclusions . . .," Brown wrote in a letter to Lanza. "All we ask is that all of the favorable aspects of the survey be included and that none of the unfavorable be unintentionally pictured in darker tones than the circumstances justify."

The documents show that Lanza did reduce his estimate of the potential damage from asbestosis. New Jersey did not include the disease as a compensable illness until 11 year later.

In an effort to obtain more material to support the industry's position before other state worker compensation boards then considering asbestosis, industry executives commissioned Saranac Laboratories in Saranac Lake, N.Y., to do studies on asbestos effects on animals beginning in 1937.

In a letter dated Nov. 10, 1936, Raybestos president Simpson noted "we do know that asbestos fibers can, and do, get into the lungs, and may set up a fibrosis condition, which for want of a better name, some doctors have called asbestosis."

The letter to the president of the Thermoid Rubber Co. in Trenton, N.J., goes on to suggest that six asbestos firms pay for the Saranac research. "We could determine from time to time after the findings are made whether we wish any publication or not," Simpson wrote. "My own idea is that it would be a good thing to distribute the information among the medical fraternity, providing it is of the right type and would not injure our companies."

The studies were funded by the asbestos industry and continued under the direction of Dr. Leroy U. Gardner, director of the laboratory, until his death in 1946. Under the terms of the funding agreement Gardner was restricted from publishing his research results without permission from JohnsManville and the asbestos industry, and little of his research was published.

In an interview recently, Dr. Harriet L. Hardy, a retired Harvard Medical School professor and occupational medicine expert, recalled she visited Gardner shortly before his death.

"He showed me cats he had been working on whose lungs were scarred by asbestos," she said. Gardner was "very much distressed because he said Johns-Manville wouldn't allow him to publish his findings."

According to other industry documents obtained in asbestos lawsuits, another manufacturer, the Philip Carey Co., hired a medical consultant in 1963 to investigate asbestos problems. The consultant reported to Carey officials in an 11-page document noting that questions had been raised within the firm over why the relationship between asbestos and cancer was not recognized earlier by the industry.

"Actually," the physician noted in his report, "they were recognized but the asbestos industry chose to ignore and deny their existence."

Carey terminated its contract with the doctor, who is a nationally recognized occupational health expert, after he suggested that the firm put warning labels on its products and predicted that unless it did it would be sued by workers who developed asbestos-related disease. No labels were put on Carey's asbestos products up to 1969, when the firm discontinued its product line that contained asbestos.

An attorney for the Celotex Corp. in Tampa, which purchased the Philip Carey Co. in 1972, declined to discuss the report or any other asbestos documents that have been filed in court.

Lawsuits against asbestos companies have also turned up evidence that several firms such as Johns-Manville and Armstrong Cock paid settlements to asbestos workers prior to 1964. Others such as Phillip Carey, Fireboard and Ownes-Corning had workman's compensation claims for asbestos-related disease filed against them in the pre-1964 period as well.

Attorneys have cited the payments and claims as evidence that the firms were aware of asbestos dangers before 1964. In his ruling in August ordering a new trial, Judge Price noted the claims and called them "compelling proof" that the asbestos firms knew of asbestos dangers even to workers using asbestos products and not exposed to the actual manufacturing of asbestos items.

At the hearing on the motion for a new trial before Price, attorneys for asbestos firms strenuously objected to the relevance of the payments claims. Markusson, Johns-Manville's attorney, noted recently that medical data supporting some of the claims is incomplete.

"We reviewed those cases and found there was not a complete medical file on many of them," Markusson said. "There are a number of those cases that I am really not satisfied prove anything."

In addition to the industry records, attorneys handling asbestos claims have begun submitting copies of sworn depositions and statements from two former Johns-Manville officials and indicate the company knew of asbestos problems for workers in the early 1950s but took no action to warn those who developed lung trouble from asbestos.

In sworn depositions given in 1976, Dr. Kenneth Wallace Smith, former Johns-Manville medical director, said he informed company officials of dangers of asbestos insulation workers in 1952.

Smith, who is now deceased, noted that he had published scientific reports contradictory to his private warnings to company officials. He said there were occaions when his warnings of workplace dangers from asbestos were ignored by Johns-Manville executives.

Smith said that in 1951 or 1952 medical officials of Johns-Manville suggested placing caution warnings on the firm's insulation products became of asbestos danger to workers using them.

Johns-Manville did not put the warnings on its products until 1964 and in soem cases, according to company documents, asbestos warnings were not put on the firm's Canadiam division products until 1953.

Smith said he discussed the potential asbestos danger with Johns-Manville executives. Their reaction, he said was, "We know that we are producing disease in the employes who manufacture these products and there is no question in my mind that disease is being produced in non-JM employes who may use certain of these products."

Motley, the South Carolina attorney, said in a recent interview that Smith did a study of Johns-Manville workers in 1949. In the study, Smith, then head of the Canadian medical department for the company, noted that some of the workers had asbestosis but were not told.

Noting in his report thast the disease was "irreversible and permanent," Smith continued, "Eventually, compensation will be paid to each of these men. But as long as a man is not disabled it is felt he should not be told of his condition so that he can live and work in peace and the company can benefit by his many years of experience."

Another Johns-Manville official, Wilber Leslie Ruff, testified in a sworn statement this year that the company had a policy until 1971 of not telling workers if their biennial company physical showed signs of asbestosis or asbestos-induced lung cancer.

Ruff, who managed the company's plants in Pittsburg, Calif., and Manville, N.J., said the asbestos diseases were considered ""a sort of hush-hush condition."