IN A LETTER ON this page today, Rep. S. William Green (R-N.Y.) argues for public subsidies to keep "well-heeled or well-connected candidates" from monopolizing House campaigns.Mr. Green knows whereof the speaks. His opponent last fall, Carter Burden, spent over $1.1 million of his own wealth in a year-long run for the House. But don't think Mr. Green struggled through on a shoestring. In the course of edging out Bella Abzug in a special election in February 1978, and then holding off Mr. Burden in November, Mr. Green spent about $310,000 of other people's money-and over $522,000 of his own.

Even in Manhattan, such lavishness on the part of wealthy candidates is breathtaking. Yet it cannot be curbed without running afoul of the First Amendment. And what happened in this $2-million district does illustrate some important points about money and competition in campaigns.

For instance, the outcome shows once more that the biggest spender does not automatically win. Mr. Burden's extravaganza was the kind most candidates $175,000 for a stable of consultants and strategists; another $100,000-plus for staff salaries and expenses; about $325,000 for television and radio ads; at least $45,000 for newspaper ads; over $300,000 for printing and mailings; more for phone banks, office outfitting, buttons, shopping bags, banners, parties, poll-workers' lunches, parking tickets, legal aid. At year-end, his committee owed $1,035,237.33-$995,000 to Mr. Burden and over $40,000 in unpaid bills, including one for $577.38 from the trash collector. And Mr. Burden had lost by 6,479 votes.

Congress could probably make wealthy candidates stop listing their personal outalys forever as interest free "loans." But should Congress adopt the kind of public-subsidy plan that Mr. Green supports in order to discourage or counter free-spending?

In a race between the rich, federal aid would be gratuitous. Spending limits would be nice, but any set of opponents may adopt those voluntarily right now. And if one wealthy candidate rejected limits and poured in his own funds, the other would be sorely tempted to follow suit. Mr. Green's own experience makes that point. He could have run "on issues rather than checkbooks," to use his words, and made Mr. Burden's extravagance even more an issue than it was. Instead he tried to match Mr. Burden by "lending" his own campaign $280,000 after Oct. 1.

True, most House aspirants don't have that choice-and they are the ones that public subsidies are meant to help. Yet even if such a program is wise and workable, which we doubt, would it really make politics more healty, open and competitive?

One expert witness on that point is Rep. Don Ritter (R-Pa.), who unseated eight-term Rep. Fred Rooney last year. Mr. Rooney had substantial support from national interest groups; Mr. Ritter raised $47,000. Federal aid would surely have bolstered him. Yet Mr. Ritter recently testified against public financing because he fears that it would discourage grass-roots participation and "replace the volunteer with a preprogrammed campaign operation . . . run by professional political operatives."

To see what he means, loo again at the Burden campaign. Aside from the overall price tag, what is most stunning is the vast sum-at least $400,000, by our count-that was consumed in paying, feeding, equipping and otherwise supporting a bevy of campaign advisers, workers and friends. That is the way many campaigns are tending-and that's one big reason why spending in House contests has about doubled since 1974. Adding $25 million to $45 million in public subsidies could further inflate all the expense accounts and make wealth and incumbency even more formidable factors then they are now.