On the outskirts of town lies the 32-acre reservation of the Oneida Indians of New York, all that remains of what the Oneidas say was once a six-million-acre aboriginal homeland.

Because of treaties going back to 1785, the Oneidas say they were illegally and unconstitutionally deprived of their homeland, which once stretched through the middle of New York State, touching Pennsylvania and Canada. They want the courts to return title to them.

In a series of lawsuits beginning in 1970, the Oneidas have tested the legal ground and have found it firm.

As a tribe, the New York Oneidas have not formally claimed the six million acres. They started in 1970 with a claim to 100,000 acres in Mdaison and Oneida counties in a test case that so far largely has gone their way. Whether they will lay claim formally to the rest of the land probably will depend on the outcome of the 1970 test case.

Allan van Gestel, an attorney defending the two counties who has experience in Indian land claim cases in Massachusetts and Rhode Island, says that the Oneida claims are "much more significant and much more difficult to defend than any of the others."

According to Jacob Thompson, legal adviser to the Oneida Indian Nation of New York, what the state paid the Indians for the land "was inadequate and unfair, and the value of the land, as well as the power of the state to make treaties, was misrepresented to the Oneidas."

Van Gestel is appealing U.S. District Judge Edmund Port's rejection last May of Van Gestel's motion to dismiss the 1970 lawsuit. The Indians ceded the 100,000 acres involved in that suit to New York State in a 1795 treaty.

Two years ago, Port ruled in favor of the Oneidas in the 1970 case. Included in his decision were 871 acres that officials of Madison and Oneida counties believed were public property: 120 miles of highway (810 acres), 47 acres of parkland, 12 acres of gravel bed and two acres for a radio tower. According to an appraisal that the Oneidas contracted for, the 871 acres are worth $5.6 million, or an average $6,450 an acre.

If Port is upheld on appeal, van Gestel says, it will mean that the 1795 treaty and other land transfers from the Oneidas are invalid and "the Indians still own that land."

As owners of the land, he added, "they can do what they want," including ejecting current occupants.

In addition to the 1970 case, other Oneida lawsuits claim land and damages from private landowners, the state and the U.S. government arising from the ceding of property from the tribe in 26 treaties between 1785 and 1842.

Some landowners in Madison and Oneida counties are getting apprehensive. A 1974 suit filed against 21 private landowners in this city has effecitvely frozen land sales in the 724-acre claim area because of fears that property titles are clouded.

Ruth Urban, one of the 21 landowners, says she knows of no houses sold within the claim area since the case was filed.

"People would like to sell, but they can't," she said.

The 21 landowners have delayed paying their real estate taxes, an action that has cost the city between $40,000 and $50,000 a year in revenue, according to Mayor Herbert Brewer.

Another defendant, former mayor Abraham Williams, says that he doubts he could sell his 200-acre farm for more than a quarter of its value because of the land claims.

The effect of the lawsuit has spread beyond this city. In Syracuse, Howard Helf, spokesman for the Title Guarantee Co., says property titles in the Indian land claim area are not being insured.

"We don't really take any position as to whether the claims are good or bad. In the last analysis, we don't know how the claims are going to turn out," he said.

One Syracuse title firm, believing that the Oneidas' claim eventually will be satisfied by a negotiated monetary settlement that Congress will have to approve, continues to provide title insurance.

John McGuire, executive vice president of Monroe Title and Abstract Corp., says, "We feel the Indians will never dispossess people in the area."

Thompson, the Oneidas' legal adviser and an adopted Oneida, says the situation could be worse than it is.

"By proceeding through the courts the way we're going, there will be very little disruption. We could create much more disruption and havic if we wanted to," Thompson said.

The Oneidas' basic contention is that New York State illegally took their land in 26 treaties between 1785 and 1842. In treaties of 1785 and 1788, the Oneida Nation ceded to the state the bulk of the six million acres, north and south of the land claimed in Madison and Oneida counties. The Indians assert that the treaties violated the articles of confederation, which forbade the states from making treaties with Indians.

In 1790 Congress enacted the Nonintercourse Act, stating that Congress must approve all land sales from Indians to private parties or local governments.

Port ruled two years ago that Madison and Oneida counties are liable to the Oneidas for damages because the two counties occupy part of a 100,000-acre reservation purchased illegally in 1795 by the state, in violation of the 1790 Nonintercourse Act.

Madison County has taken the position that the federal government is responsible for the Indian land claim in the first place, and it should settle the Oneida cases. Last month the county board of supervisors asked the area's congressman, Rep. James Hanley [D-N.Y.], to introduce a bill that would ratify the treaties retroactively, thereby extinguishing the Indian land claims.

For four years a rift in the New York Oneidas has hindered Interior Department efforts to negotiate a settlement. The Oneidas are split over what form of tribal leadership they wish to support.

"It's very hard to sit down and negotiate with a group which amongst itself isn't able to agree on what its position should be," said van Gestel.

Despite the rift, Oneida lawyers are optimistic about their case. Some see it as a test of the American legal system.

"The only thing we are looking for is justice -- justice under another government system, and I think it can be gotten," says Jacob Thompson.

The Indians maintain land was taken from them more than 150 years ago in violation of the federal Nonintercourse Act of 1790, which provided congressional protection to tribes living in"Indian country."