From the many corners of this perpetual city on the make, a few friends of Nelson Algren came to Second City Theater last night to pay a belated tribute to their pal.

Algren died more than a month ago and lies buried in a whaler's grave at a place called Sag Harbor on Long Island, a long way from Chicago's concrete canyons. His funeral was attended by a large group of new friends, friends he had made since leaving Chicago for good in 1975.

But the people who came to Second City yesterday were the people who knew Algren best. Big shots, cabbies and cooks, they came to give Algren what he deserved: a Chicago farewell.

So last night the tributes and the praise were back where they belonged. The memory of Nelson Algren was home and the booze was free.

"That's the way Nelson would have wanted it," said Studs Terkel.

About 100 of them gathered for nearly 90 minutes and about 10 of Algren's friends said their piece.

Terkel, one of his oldest pals, acted as master of ceremonies.

"This is a celebration rather than a service," he said, backed by the jazz piano of Fred Kaz.

And so it was. Humorous stories flowed, stories from such old friends as photographer Stephen Deutch, Pulitzer Prize-winning poet Gwendolyn Brooks, politician Len Despres, and Dave Peltz, and one of Algren's younger friends, a reporter and editor at the Chicago Sun-Times, Jan Herman -- stories about writing and money and horses and his loves.

There were a few tears and a lot of laughter, a gentle evocation of the Chicago original that was Algren.

Algren would have enjoyed the entire scene. He always loved attention and praise, loved it so much that he rarely discriminated against the source. And one could almost see him standing against the wooden walls of the theater and listening to it all, a smile on his face, that high-pitched laugh caught forever in his throat.

His appearance was best described by Terkel as "that of a horse player who just got the news: he had bet her across the board and she came in a strong fourth." That's how everyone wanted to remember him.

Most of the people there hadn't seen Algren in some time. In 1975, he bought a one-way ticket from Chicago, the city that had so deeply affected his life and work, and moved to Paterson, N.J., to work on a magazine article.

But most of these people knew Algren and knew him well.

They knew that he had moved for the last time in the fall of 1980, to a small cottage in Sag Harbor. And they knew that was where he died on May 9. He collapsed in the bathroom: heart attack. The smashed dial on his wristwatch stopped at 6:05.He was 72. But yesterday a story Algren used to tell was recalled.

"When I was in the war I met this palm reader in Germany," Algren would say to his friends. "She told me that I had a long lifeline that came to an abrupt end. A blond woman, well-proportioned, is going to hit me on the head with a blunt instrument. But she's going to get off by saying that she thought it was a rose. That's how I'm going to meet my end. I will be 77 at the time."

People came to Second City, an improvisational theater, to recall stories like that. It was not scheduled to be a morbid evening. Rather it was a lively party in which the wine and the memories flowed freely.

"The place could have been jumping," said Terkel. "Now, we'll just keep it cool."

And how Algren loved parties. He was never a heavy drinker but he was a good man to have at a party. With people he liked, he could be incredibly amusing, filled with stories, vital.

"Nelson was the funniest man around, which is another way of saying that he was the most serious," said Terkel some years back. "He often played the madcap to keep his balance and ours."

Nelson Algren came to Chicago from Detroit when he was three years old. After graduating from the University of Illinois with a degree in journalism in 1931, and unable to find newspaper work, he wandered the country taking whatever jobs came along -- door-to-door salesman, farm worker, gas station attendant and carnival shill. He spent four months in a Texas jail after walking into a college classroom and walking out with a typewriter under his arm.

In 1933, a short story of his called "So Help Me" was published in Story Magazine. It attracted the attention of the editors at Vanguard Press who asked if it was part of a novel. "Yes it is," said Algren and he received an advance of $10 for his first novel, "Somebody in Boots," published in 1935.

His second novel, "Never Come Morning," came out seven years later. Shortly after publication the book was temporarily banned from the shelves of the Chicago Public Library. It seemed the Polish community didn't like what he had written about the Chicago neighborhood.

But Ernest Hemingway, never one for lavishing praise on other writers, liked the book so much he called Algren the best novelist in America after William Faulkner, and Jean-Paul Sartre championed Algren overseas.

But it wasn't until the 1949 publication of "The Man with the Golden Arm" that Algren achieved success in America. The novel won the first National Book Award in 1950 and was made into a movie starring Frank Sinatra.

Algren hated the film, for which he received a paltry $10,000.

He wrote his last novel and the one he considered his best, "A Walk on the Wild Side," in 1956. He was given $15,000 for the movie rights to this once. He did not see the film.

He never wrote another novel. Over the last two decades and more, all he turned out were stories, essays, poems and a lot of journalism, much of it collected in "The Last Carousel," published in 1973.

His friends at Second City knew well the particulars of his career, but the years and titles became fuzzy, unimportant.

There were his two marriages and two divorces, but most interesting was his highly publicized affair with Simone de Beauvoir, the French novelist and feminist. Algren first met her when she came to Chicago in 1947. But he did not know who she was at the time and spent their meeting telling her stories about the war in a Palmer House Hotel restaurant.

Their relationship took flight in the next year when they traveled down the Mississippi to New Orleans and then around the U.S. and Central America.

In 1949 Algren journeyed to Paris and lived with de Beauvoir for a time in her Rue Boucherie flat. Later they traveled together through Europe. They were not as incongruous a pair as people might imagine now. Her feminism never stood in the way of their friendship. To hear old friends tell it, they were a "lively, likable pair."

But when de Beauvoir began writing about their relationship in novels, such as "The Mandarins," and published excerpts of Algren's letters in Harpers magazine in 1964, Algren became furious and the relationship iced.

But Algren's pals met to talk about a man they saw as a tough romantic, who wrote about the lost souls of Chicago's depths, the misfits of the bleak city underworld, and wrote about it with more sensitivity, humor and understanding than anyone has before or since. He chronicled the nightmarish lives and the sights behind the billboards here in this "back slum loud mouth" that he called Chicago.

"Chicago literally has become my trade," Algren said 20 years ago.

He was Chicago's writer and that's what his friends remembered.

There was much talk last night about that fierce, bitter 92-page tribute to the city called "Chicago: City on the Make," the remarkable prose poem he wrote in 1951.

"Nelson Algren saw this city better than anyone ever has," said friend and Chicago Sun Times columnist Mike Royko some days before. "If you're going to understand this city, you've got to read "Chicago: City on the Make" and his short stores. They ought to be taught in the schools."

Despres, the former maverick alderman of Chicago's Fifth Ward, agreed last night. "I'd put 'City on the Make' on the mayor's desk, on every alderman's desk. I would make it required reading for everyone who takes the Civil Service exam in this city."

His pals didn't seem to care that Algren's name will never appear in the company of Hemingway, Faulkner and Bellow, that other Chicago writer. Bellow may be the greatest Chicago writer. But Algren was Chicago's writer.

"He said Chicago was a broken-nosed beauty and once you loved her, you can never love another as well," said Royko, paraphrasing Algren after hearing of his death. "The city never loved him that way, which is what made it a great romance. He loved the city more than the city loved him."

But that was not the reason Algren left Chicago in 1975. He went to Paterson to work on an article about Rubin "Hurricane" Carter for Esquire magazine. He would have left Chicago earlier if he had had a good reason.

"I'd rather live in Paris than Chicago, rather live in New York than Chicago. I'm quite uncertain about staying on," Algren said 20 years ago. "I'm not as confident as I was 10 years ago that it makes any sense to stay on in Chicago."

But how Carter must have appealed to him: a former middleweight boxer, a contender for the championship who was convicted of a triple murder only to have that conviction overturned.

Then things went all screwy. In a second trial, Carter and his codefendant were convicted and Esquire decided not to publish Algren's piece. c

He moved to Hackensack, N.J., and began to write a nonfiction book about the case. He couldn't get it into print. So he wrote a novel around the bits and pieces of the Carter case. But he couldn't find an American publisher for that either. (That novel, "The Devil's Stocking," is scheduled to be published in West Germany along with a retrospective re-issue of several earlier Algren works this fall.)

Everyone will tell you that his last year in Sag Harbor was a happy one. He had many new friends like authors Kurt Vonnegut, Irwin Shaw and Peter Mathiessen, and Gloria Jones, the widow of author James Jones.

All of these people, and other new friends, had been invited to a party Algren was throwing to celebrate his scheduled induction as a fellow of the American Academy and Institute of Arts and Letters. But he died in the morning and his new friends went to a funeral instead.

Few of the people at last night's memorial attended that funeral and that is good. That way the shadow of death did not sit heavily on memories.

Algren's interests ranged from betting the horses to comprehending ESP and that he was convinced he could do both. His friends remember that he loved children.

He lived by no one's rules but his own: "Never play cards with any man named Doc, never eat at any place called Mom's, and never, ever, no matter what else you do in your whole life, ever sleep with anyone whose troubles are worse than your own."

But where were the familiar faces? Where were Dove Linkhorn, Sparrow, Sometime Willie, Lost Ball Stahouska and the rest of Algren's antic characters? Dammit, where was Nelson?

To hear his friends tell it, he was at Second City last night.

"When I have a party, it's hopeless . . .," Algren once said. "It's a hopeless bunch of horses' asses."

But not last night. Just a bunch of pals, saying so long.