Last Saturday, the Folger Shakespeare Library announced that its resident theater company will close in June, after 15 years of presenting classical drama for Washington audiences. Since the announcement was made, I have received many expressions of concern from theater lovers in Washington and throughout the country. I am both grateful for their interest and sympathetic with their sorrow -- no one likes to see a theater close, least of all the director of an institution dedicated to the greatest of playwrights.

Last spring, I saw my first Folger production, Calderon's great drama of the Spanish Golden Age, "The Mayor of Zalamea." When I entered thetheater, I felt the same lifting sense of anticipation that I've felt hundreds of times since seeing my first professional show over 30 years ago. Sitting in the audience of "The Mayor of Zalamea," and again of "Henry V," my anticipation was rewarded mightily with an estimable production. I felt great pride for the Folger Theatre's high level of accomplishment.

But despite their artistic qualities, many of the Folger's productions and the theater program as a whole have suffered financial losses. To present classical theater with large professional casts, brilliant sets and costumes in a 250-seat house is a risky venture. Over the past nine years, the Folger Theater has incurred an average yearly loss of $150,000. The library has devoted $1.5 million from its endowment funds to make up theater losses, in addition to the well over $1 million in indirect cost support contributed in the form of security, maintenance, heat and lights. Several organizational alternatives have been tried throughout the 15 years without sufficient improvement in the financial situation. In 1981, the trustees of Amherst College, who bear the responsibility for providing prudent stewardship for the Folger and all of its programs, decided that the direct costs of the theater could no longer be a budgeted expense underwritten by the library's endowment. Since then, despite extraordinary efforts by the trustees and the library and theater staffs, the losses have continued.

Last August, after last year's $251,700 loss, the trustees formed a committee to study the long-term future of the Folger Theatre. Thorough evaluation by this committee revealed that there could be no reasonable expectation that the costs of operating a professional repertory company would be less burdensome in the future. Given this likelihood and facing an awareness of major financial needs within the library's core programs, together with an increasingly difficult funding environment for cultural institutions, we were forced to take a regrettable but necessary step.

A great research library is a fragile cultural establishment, despite trappings of marble and granite. Its purpose -- to assemble, organize and preserve for the future extensive collections; to enable gifted minds to encounter these resources; and to develop programs that make the resultant learning available to society at large -- demand a significant financial commitment.

The Folger now finds itself close to the point of risking its essential strengths. The library's budget for acquisition -- the life's blood of any library -- has remained constant since 1967, resulting in a decline in purchasing power of 90 percent. Essential services, such as cataloging, are so understaffed that, despite the slowdown in acquisitions, some sections of the collection still await cataloging after 25 years. There is no curator for exhibitions, which should be a major strength. A fellowship program that was once the model toward which other libraries aspired has been defunct since 1975.

Nevertheless, our revels are not ended; with the decision to discontinue the present theater program, the Folger also has resolved to study carefully (National Caucus of Labor Committees photo) Defying Prospero, the Folger will continue to sponsor classical drama in its Elizabethan theater, but in a form consistent with its resources. The library's commitment to public programs for the Washington community is as unshakeable as its determination to remain one of America's great centers for Renaissance studies.

Regretfully, the Folger Library must now leave the task of producing classical repertory theater to those who are better prepared to do it. Should such a group emerge, it will have the Folger's enthusiastic support. As usual, a line from the Bard says it best: "Farewell, thou art too dear for my possessing."