THE CHRYSLER Corporation is entitled to warm applause for its announcement that it will now repay the remaining $800 million in loans that the federal government guaranteed. The company, which would surely have collapsed without them, has used its opportunity well. It has produced a successful new line of cars. It has handled its labor relations skilfully. It has held its network of dealers together. Internally, it has put itself through the fiercest kind of wringer to raise productivity. It has pulled itself into a strong position to benefit from the economic recovery that is now lifting automobile sales.

Was Congress right, then, to extend the guarantees and save the company? That's a different question, and much harder. It is by no means clear that the rescue of Chrysler has had any effect on the total number of jobs in the American automobile industry, or that the number of cars being sold by the domestic producers is any higher than it would otherwise have been. If Chrysler's survival only means fewer jobs in other American factories and fewer sales by them, the case for federal help is not compelling.

With the recovery, the domestic producers' share of American sales has been rising. But that is owed in some part to the import quotas on Japanese cars. It will be some time before it is possible to say with any assurance that the domestic cars are going to recapture any significant share of the market they lost in the 1970s.

Congressmen who voted for the rescue argued that they were preserving competition in the American market. But the real competitive pressure is now coming from the foreign companies, whose presence in this country is increasingly well established. Since Congress voted the Chrysler loan guarantees, Renault has taken control of American Motors, and General Motors has announced a joint venture in California with Toyota. Chrysler itself seems to be engaged in similar discussions with Volkswagen. The world's automobile industry is reorganizing itself very rapidly, and saving one American company is not likely to affect the number of producers that will be competing in this country in the 1990s.

The best case for saving Chrysler may well have been a matter of national morale, not economics. The dramatic collapse of a big corporation might have had a disproportionate effect on people's anxieties, aggravating a period of recessions and high unemployment that has been, in truth, bad enough. But that kind of argument is never quite convincing. The revival of Chrysler has been a remarkable demonstration of a company's determination to save itself. But it does not quite add up to a persuasive precedent for bailing out the next big company that starts to slide.