Leonel J. Castillo's stormy two years as commissioner of the U.S. Immigration and Naturalization Service will come to an end with his resignation in September. The first Hispanic to hold that position, Castillo has been accused by veteran immigration officers of being too soft on illegal aliens and by some Chicano militants as being too harsh. In an interview with the Los Angeles Times, Castillo discussed his attempts to change the public's thinking on immigration.

Q: You have said the immigration laws are unjust. Why?

A: We have opened the gates in such a way that we legally let in the people who are almost the exact opposite of what is said on the Statue of Liberty. We let in the rich, we let in the oppressors in some cases, if they have money. We let in those with education. We don't let in the wretched, the poor. We let in elites, we let in persons with specific skills that we need, we let in students that we will benefit from, we let in blue collar workers that we can use. We let in only people that are healthy. We let in a number of people who in economic terms are what you would call human capital. So we are getting an economic infusion if you will, an infusion of human capital, of tremendous values from the poorest countries in the world. Our foreign policy as expressed through immigration is to receive foreign aid from the poor countries, except in the dramatic occasional cases of refugees from Communist countries.

Q: Then there is a larger group that our laws exclude. I gather that your feeling is that so-called illegal aliens are not competing with the American workers for jobs.

A: I used to fear that maybe there was an overall negative economic impact. Now, I'm very well convinced that, overall, immigrants contribute to the economic well-being of the country and that they create jobs, in effect, because they add to productivity. Some individual workers get hurt, no question; the farm workers or whoever, in particular instances. But as a country, our economy is strengthened as it has been strengthened with every immigrant group . . .

Q: Are you saying that this current migration is not a cause of unemployment

A: The greatest proof, and the Mexicans are quick to point this out, that our economy provides jobs and has a need for these people is the fact that we keep absorbing them. The Mexican government officials say, "Look if there weren't any jobs, do you think our people would go there? They could starve at home much better with their family and friends."

Q: What about the argument that they go on the welfare system?

A: Oh, no, no. All the evidence is very clear. They are not going on welfare, not the undocumenteds.

Q: They get some free benefits, health and . . .

A: They get very few benefits. All the studies show they pay much more to our system than they get from it. We did one very famous study where 55,000 AFDC [Aid to Families with Dependent Children] recipients were looked at thoroughly to see how many of them were here as undocumented aliens. Nineteen of the 55,000 were undocumented and of the 19, 11 were Canadian, 5 were Mexican. They don't want to go on welfare because they're afraid they'll be detected and the whole idea of coming was that they have a strong work ethic.

Q: After more than two years as commissioner of immigration, were you able to have an impact on our approach to illegal immigration?

A: I think I've changed or helped to change the tenor of the thinking about the problem. I would speak with people from The New York Times or the Los Angeles Times and they would say, "Your predecessor says there were 12 million illegal aliens in this country, and you say you don't know." I'd respond, "That's right, I don't know."

Q: If 12 million is an exaggeration, what is a more accurate figure?

A: Between 4 and 6 million. That is the consensus of most of the demographic studies that have been conducted by the Census Bureau and scholars. I think 4 to 6 million is a realistic figure and, of those, approximately 60 percent are Mexican nationals.

Q: Have you been more permissive on the border than your predecessor, Leonard Chapman, the former Marine commandant?

A: No, I've been stricter.

Q: In what ways?

A: More apprehensions, more equipment, more people, better training, and more output per person.

Q: So why does the border patrol's morale seem so low?

A: Because the job just keeps getting more and more trying. "It has nothing to do with me. It has to do with a lack of policy.

Q: But isn't this the dirty little secret of our government's immigration policy? That our policy on immigration is not to have policy?

A: Our policy is to have a half-open door and a half-open wallet.

Q: What is that?

A: That just means that we don't want to open it fully and properly so that people can walk in decently with heads held high, nor do we want to slam it and keep them completely out. So we let them kind of squeeze their way in through the door, and then we hire them with our half-open wallet; we pay them less than we pay other people. But we're not going to give them all the benefits that you might get with a full wallet.

Q: Well don't you think that you were a party to this business of the government conniving with employers to get cheap labor into the country, hurting not only the aliens but also American workers?

A: We, as part of the national policy or lack of national policy, find ourselves in the positions of being squeezed by both employes and unions. It is a dumb way to handle it . . .

And I think it will take very decisive and forceful action to get it turned around because the longer we wait the more entrenched the system becomes. The longer we wait to deal with it, the more money is being invested in this kind of system. Employers have built up major industrial concerns that have come to depend upon this labor. If somehow you disrupted that flow or interrupted it, then they would all scream . . .

Q: Two years ago, the Carter administration proposed a substantial rewrite of the immigration laws, including the granting of amnesty to "illegal aliens" residing here before 1970. Are you leaving the administration because of its failure to pass that legislation?

A: We all messed up on that. I blame myself and everybody who has been working on it. I think the mistake that we made was that we were willing to compromise. We should have said, "This is themoral, the right thing to do, and that's why we are doing it." But then we let Congress off the hook . . .

Q: Is there a liberal-conservative break on this issue?

A: The liberals are more restrictionist than conservatives. They just don't think that there's enough in this country. They've bought this limits of growth and limits of wealth and limits of everything and are arguing it so completely that they've become limited. I'm not suggesting that we should try and get 800 million people into the United States, but I do know that Alaska and many parts of the United States could easily accommodate two and three times their current population.

Q: But aren't we bailing out Mexico and other Latin American countries by letting in the illegals? Aren't we paying for their failures?

A: Take a young man in El Salvador or Mexico. He gets a skill in a vocational school, and he's ready to be a productive member of this society, and he leaves to work for some other society that is more developed. And what he sends back is enough to keep his family on subsistence because he is not fully into the more advanced, developed society. So, in effect, they are subsidizing us.

Q: The illegal flow is ultimately a drain in Mexico's economy?

A: Oh, no question. Can you imagine what would happen if 10 to 15 million young Americans decided to leave to go to work in Canada? Ten to 15 million young men disillusioned with you because you can't provide them with jobs, you can't give them food. It is like going to war and losing all your young men.

Q: Most of the illegal immigration is from Mexico. How is this affected by existing emigration law?

A: You get 20,000 per country, a low quota for Mexico. As a result, the law requires that Mexican resident aliens be separated from their spouses and children who are in Mexico. And this just seems to me to invite people to come over anyway to live with their families. The law also is very deficient in the way it is interpreted by the Department of Labor. We are allowed to bring over fewer than 1,000 Mexicans annually to work temporarily in the United States. The Department of Labor argues that there aren't any jobs for more than that. So they come in anyway and work in many places totally outside the law.

Q: Why don't legal U.S. residents want those jobs?

A: They're not socially attractive jobs in this country anymore. And there is also the fact that if you are a U.S. citizen the social net called unemployment insurance and welfare and all of these things catches you. Whereas the undocumented -- he has no net. When he falls, he hits. So he has to take a job. He doesn't have the option of considering between four or five jobs.

Q: Getting back to quotas. Are you saying that we should let them in, as many as want to come?

A: No, I'm saying that a good hemispheric policy would mean we have to have reasonable quotas as part of our overall effort at assisting job development in sending countries.

Q: What do you think would be a reasonable quota for Mexico?

A: For Mexico, it clearly must go back up to at least to where it was before 40,000.

Q: When was it 40,000?

A: Until 1976. Congress decided then it would treat all countries the same, so they said everybody will get 20,000.

Q: Why should we favor Mexico with a larger number?

A: Because we have more ties with Mexico than with any other country in the world, because we have more daily relationships and because our economies and our cultures are so intertwined that it is just recognition of a reality.