The Senate select committee's study of the N.S.A., one of the most extensive independent examinations ever made of the agency, was initiated in the wake of Watergate and the disclosure of other abuses by Federal intelligence agencies. During the course of the investigation, its chairman, Senator Frank Church, repeatedly emphasized his belief that the N.S.A.'s intelligence-gathering activities were essential to the nation's security. He also stressed that the equipment used to watch the Russians could just as easily ''monitor the private communications of Americans.'' If such forces were ever turned against the country's communications system, Senator Church said, ''no American would have any privacy left. ... There would be no place to hide.'' Over the years, N.S.A. surveillance activities have indeed included Americans who were merely stating their political beliefs. The agency first became involved in this more questionable kind of surveillance in the early 1960's when either Attorney General Robert F. Kennedy or the F.B.I. asked it to monitor all telephone calls between the United States and Cuba. This list of international calls was significantly enlarged during the Johnson Administrtion as Federal authorities became concerned that foreign governments might try to influence American civil-rights leaders. The N.S.A. gradually developed a ''watch list'' of Americans that included those speaking out against the Vietnam War.

According to the subsequent investigation by the Senate Intelligence Committee, a total of 1,200 Americans were targeted by the N.S.A. between 1967 and 1973 because of their political activities. The subjects - chosen by the F.B.I., the Secret Service, the C.I.A. and the Defense Intelligence Agency -included members of radical groups, celebrities and ordinary citizens. When it appeared that Congress might learn about the eavesdropping, the surveillance halted.

The Senate intelligence committee also discovered a second illegal surveillance program, under which the N.S.A., and its military predecessors, examined most of the telegrams entering or leaving the country between 1945 and 1975. The program was abruptly halted in May 1975, a date coinciding with the Senate committee's first expression of interest in it.

The records obtained by the committee indicate that from the project's earliest stages, both Government officials and corporate executives understood that the surveillance flatly violated a Federal law against intercepting or divulging telegrams. Certainly, they were aware that such interception violated the Fourth Amendment, guaranteeing against unreasonable searches and seizures, which also holds that a court warrant can be issued only when there is probable cause to believe a crime has been committed.

Using the information thus gathered, the N.S.A. between 1952 and 1974 developed files on approximately 75,000 Americans, some of whom undoubtedly threatened the nation's security. However, the agency also developed files on civil-rights and antiwar activists, Congressmen and other citizens who lawfully questioned Government policies. For at least 13 of the 22 years the agency was building these files, the C.I.A. had access to them and used the data in its Operation Chaos, another computerized and illegal tracking system set up during the Vietnam War. At its peak, the Chaos files had references to more than 300,000 Americans.

Several months after the hearing, the Senate intelligence committee issued a report that expressed great concern about both the N.S.A.'s activities and the failure of Congress and the Federal courts to comprehend them. ''The watch-list activities and the sophisticated capabilities that they highlight present some of the most crucial privacy issues now facing this nation,'' the committee warned. ''Space-age technology has outpaced the law. The secrecy that has surrounded much of the N.S.A.'s activities and the lack of Congressional oversight have prevented, in the past, bringing statutes in line with the N.S.A.'s capabilities. Neither the courts nor Congress have dealt with the interception of communications using the N.S.A.'s highly sensitive and complex technology.'' The committee recommended that Congress approve specific legislation spelling out the precise obligations and limitations of the agency. With the end of World War II and the start of the cold war, the value of effective intelligence remained high. In 1952, a special Presidential committee recommended the establishment of the N.S.A., replacing the four separate surveillance agencies within the Defense Department, concluding that a unified effort was essential because electronic surveillance of international communications ''ranks as our most important single source of intelligence today.''

The logic of the cold war also dictated that intelligence include not only secret blueprints for the latest weapon or infiltrating the enemy's ranks with spies, but also early signs that a blight had hit China's rice crop, indications that a new oil field had been located in a remote corner of Russia and analysis of radio traffic at an important Soviet-bloc airport.