It could have happened clear back in the cave days: Bat droppings collect in a puddle of water, the puddle dries and leaves a white powder. One day the local medicine man throws a pinch of powder in the fire--and it flares up spectacularly . . .

Saltpeter used on the food spills onto some charcoal. It's tossed onto the fire, and suddenly there's a great white flare . . .

Then some genius in China or quite possibly India adds a little sulfur to the saltpeter and charcoal and stuffs it into a rolled-up leaf and drops a spark on it . . .

"It's amazing how little change there's been in fireworks since the very earliest times," said John A. Conkling, a chemistry professor at Washington College and a top authority on pyrotechnics. "It's also amazing how little we understand about why something blows up."

With the Fourth of July just around the corner, Conkling, as executive director of the American Pyrotechnics Association, is having a busy week. He was a prote'ge' of the late Prof. Joseph H. McLain, under whose influence Washington College became an internationally known center for the study of fireworks.

"Some really basic chemistry is involved here. Some things will go off if you look at them cross-eyed--just the least friction is needed. And some of the dynamites can be dropped and hammered and nothing happens. Potassium chlorate is a white powder that looks highly stable, but it's not. It wants to give up its oxygen so badly that it goes off at the slightest thing. It's hardly ever used any more."

Conkling and Washington College are one of the main reasons why your back-yard fireworks are so much better than they were, say, 15 years ago. Every American family must remember those tackily packaged cones and candles that were always fizzling out or tipping over or exploding through the side. But in 1972 the industry, facing possible action by the Food and Drug Administration, asked for help.

"We came up with a list of chemicals that shouldn't be used," he said, "and guidelines for better fuses, more solid bases, things like that. Cherry bombs had already been banned in '66, when powder content was limited to 130 milligrams. But now it was cut to 50 milligrams. This makes just a little pop. We took the bang out of the Fourth of July."

Today, firecrackers (the ones that bang) are legally sold only in 19 states, while fireworks (the ones that shower and shriek) are far more common. Since the new regulations went into effect in 1976, not only has quality improved dramatically, but back-yard sales are up 40 percent, Conkling said, and some states have even relaxed their laws because of the greater safety.

Enter the Dragon. China got into our fireworks market in a big way a decade ago, but now there was a problem: how to make their product fit our new standards.

"It was a nightmare. They thought we were putting up a trade barrier. We had to have labels in English, so we'd send them American samples for their people to copy, and they'd copy the whole thing, including the name of the American company."

Two years ago Conkling went to China, gave seminars to 130 fireworks manufacturers, clearing up the situation so thoroughly that today China accounts for over half our $100 million back-yard fireworks business. (Another $30 million goes into display sales.)

"It's a strange business. Even the biggest companies are tiny, with no more than 100 employes."

It's also a business of ancient tradition, going back to the days when the Chinese cracker makers used to whisper while they worked, lest they irritate the irascible soul of the powder.

Conkling, 38, spends a lot of time taking fireworks apart in his lab. Some of the Chinese effects, like "Golden Monkey Plays an Umbrella" and "Flowers Charm Silver Snake," are beautiful and remarkably sophisticated, he observes. Oh yes, he sets them off, too. His children are 11 and 12, and they just love to see Dad come home with a briefcase full of homework.