IN CALIFORNIA DREAM LURK NIGHTMARES.

Byline: Rich Martin Special to the Daily News

Title: ``Endangered Dreams''

Author: Kevin Starr 

Data: 352 pages, Oxford University Press; $35

Our rating: Four stars

It's disturbing to be reminded how close the United States came to exhibiting fascist tendencies during the 1930s and to be shown the foolishness of the belief that our country was somehow blessedly exempt from the darkness of the '30s.

No one has shown this better than California State Librarian Kevin Starr, who has managed to provide a fascinating narrative of California during the Depression - and much more - in ``Endangered Dreams,'' the latest in his series about state history.

Starr has provided the social and cultural context that illuminates the age, and his stories of the strange characters who made history during that time are like something Hollywood would dream up. And the trends are detectable in the present, making it tempting to draw comparisons.

Beginning in the late part of the 19th century, Starr casts California as alternately rich and desperate. After the railroad work ended in about 1877, Chinese and Irish laborers were out of work and out of luck, and in that year began the ``acting out (of) a symbolic scenario of insurrection and repression'' that would be repeated over and over during the 1930s.

San Francisco's Chinatown was pillaged in July 1877, with four killed as the Chinese workers became the focus of resentment, particularly among Irish workers. An Irishman named Denis Kearney became the new leader, fanning the flames of resentment: ``Denis Kearney drew his strength not merely from the realities of his massive, incoherent resentments and his semi-literate preachments, but from the celebrity's ability to be real and unreal simultaneously - to become, that is, a symbolic presence removed from ordinary reality and allowed an extraordinary latitude of behavior and statements, like a figure in a dream - or a nightmare.'' Some might see him as akin to another Irish-American on the political scene right now.

Reform movements began in the 20th century to address some of the appalling conditions of workers, and the same drama unfolded each time: protest, reaction (including Red Scare tactics), near-chaos.

Many Californians know about the interning of Japanese-Americans during World War II, but few know how far the forces of reaction went during the Depression. Unconstitutional laws, such as the Criminal Syndicalism Act and an anti-picketing ordinance, were passed. The judicial system acted as part of a threatened oligarchy, Starr shows, and some of the trials seem more like something out of Stalin's Russia than American trials. Some strikers were killed by vigilantes, and it's remarkable that more were not killed.

The high-water point of the Depression in California, at least for drama, was the general strike in San Francisco in 1934, narration of which reads like events in Europe. The port was closed in May, and at the height of the anti-labor violence - Bloody Thursday, July 5 of that year - two men were killed. Labor won a victory in that strike, which lasted 83 days. (The general strike lasted four days.)

The desperate nature of the times led to some strange ideas. One of the oddest was Francis Everett Townsend, an emigre from Iowa whose Townsend Plan became a rallying cry for thousands of retirees who lost all their savings in the Depression. He proposed that all people over a certain age get $150 per month, with the requirement that all that money be spent before receiving the next check. The plan would have been financed with a national sales tax.

But perhaps the most fascinating character of all is Upton Sinclair, the author who ran for governor in 1934 under the EPIC (End Poverty in California) banner and very nearly won, even though almost the entire California establishment ran against him and FDR stood on the sidelines. That campaign was one of the nastiest and strangest in U.S. history.

Most of all, Starr has shown the danger that California surmounted during the Depression. ``In comparison to Europe, fascism in California remained embryonic. Like any embryo, however, it possessed a capacity for gestation - and birth.'' In other words, it could have been a lot worse.