How do you celebrate when the skies are gray, the streets are wet, the parks are soaked, the gasoline lines are long, the fireworks have been canceled and America, on its 203rd birthday, appears on the verge of a recession? Here are some ways that people celebrated yesterday's Fourth of July.

Chinese Pay a Visit

Tsao Kuei-Sheng, charge d'affaires for the Chinese embassy, wanted to see a small American town celebrate the nation's 203rd birthday, so he traveled unannounced Tuesday night to Staunton, Va., a rural county seat 110 miles from Washington.

The next day's damp festivities included a dozen hot-rodding Shriners in minicars, at least five beauty contest winners -- including Miss Wheelchair Virginia -- and antique cars with horns honking the first 11 notes of "Dixie."

The visiting dignitary spent the morning standing with thousands of others in a light drizzle at Gypsy Hill Park as local marching bands paraded by to the strains of "It's a Grand Old Flag."

Uncle Sam rode through town on the bed of a pickup truck.

A Confederate flag, dubbed "The Banner of Love," led one marching unit, and traditional participants such as scout troops, fire companies and baton twirlers shared the street with the Whiskey Creek Buckskinners and the Virginia Gunowners Association.

Tsao Kuei-Sheng and his entourage were presented with blue baseball caps bearing the city seal. Asked his impressions of his excursion, Tsao said through his interpreter, "This is our first visit to the Virginia countryside since our arrival here a year ago. I love this place." Kerry Dougherty

Smithsonian Spirit

"The gas lines and the recession do dampen my spirits today," said Mary Mescone, a tourist from Southington, Conn., visiting the Smithsonian. "It scares me, these gas lines. We had to take a bus to come down to Washington for this vacation. We couldn't drive for obvious reasons."

Mescone's gloom, however, was not shared by Win Singleton, 29, of Falls Church. "I enjoy the fireworks, the sense of camaraderie and a little bit of spirit. I'm not super patriotic. But since 1976 there has been a greater resurgence of a little national flavor, a national togetherness. Fourth of July just seems a lot more like a sense of getting back to roots."

Singleton's wife, Jane, 28, agreed. "To me, it seems like a day to quit thinking about the problems going on. I want to get down here and play around instead of worrying about the recession, about gas lines or about whether I'll keep my job." Joseph Contreras

'Smokers' Protest

About 400 marijuana smoke-in demonstrators charged across Pennsylvania Avenue yesterday toward the White House grounds before D.C. and U.S. Park Police drove them back with motor scooters and billy clubs.

A small but angry faction of the nearly 5,000 participants hurled beer bottles, sticks and firecrackers at helmeted police, who formed a single line along Pennsylvania Avenue in front of the White House. One demonstrator was treated for cuts at George Washington University Hospital. Police made three arrests.

Shorlty after the incident and after police reinforcements arrived, the group's permit to rally at

Lafayette Square across from the White House was revoked. Police surrounding the crowd on three sides, pushing them down 17th Street to the Mall and along the Reflecting Pool.

Smoking marijuana openly and drinking beer, thousands milled around the mall, hungry for the excitement and, as one said, "the party" that never came.

"It's just one big farce," said Byron Long, 23, who came from Smyrna, Del. "Nobody came down here to talk about Abbie Hoffman or any of the people in jail. They just came down here to get high and make a big mess of everything. We're not doing anything but make ourselves look like a bunch of fools. We're just looking like the -- our parents think we are already."

Vicki Rosenbloom, spokeswoman for the coalition of marijuana law reform groups that sponsored the event, said they had hoped Congress and the president would heed the thousands gathered and legalize marijuana. They also hoped to familiarize protesters with ongoing national concerts, billed as "rock against racism," that are meant to warn about the dangers of racism and Nazism the group thinks are growing in America.

But the protesters, many of them teen-agers who had driven or hitchhiked here from across the country, were inattentive to early speeches against racism.

"Bring on the . . . bands," shouted several, swilling Jack Daniels and smoking marijuana joints. Thomas Morgan

'Waving the Flag'

A three-story structural steel building frame was erected in the countyard of the historic Pension building at 440 G St. N.W. yesterday as part of the first Building Fair.

Don Lambert of the Iron Workers Local Union No. 5, who helped build the frame, described the day as "the best Fourth July I've ever had. You have to be a workaholic to be an iron worker, so I don't mind working today . . . It's good to see all these people down here. You know, construction is important to our economy, and it's time that people learned what it's all about."

More than 500 people came to the fair to watch, get pointers on their carpentry and electrical skills and to try a little welding with an acetylene torch -- if they wanted.

"I stood in line for an hour and one half this morning to get gas," said Arthur Dobbs of Arlington. "We were going to have a picnic with the kids at the Washington Monument and watch the fireworks later, but when it started to rain we decided to come here for a while first.

"I guess -- I know this sounds like I'm waving the flag and all that -- but I guess that this is part of the American way. If you can't do things one way, you just have to look for another way. I'm off today, and I'm going to have a good time no matter what." Mike Sager

'Good for the Kids'

"I'd call this a pre-Independence Day celebration, David Sawyer said. It's entertaining, and it's good for the kids, 'cause they'll remember it and someday ask what the game plan is for this country."

Sawyer, a young black librarian sitting on a lawn chair, said, "Democracy takes 230 million people's conscious effort. It's good to be remained we don't have that yet."

Sawyer, wearing a "Boycott J.P. Stevens" T-shirt, was watching the third group of majorettes march in Takoma Park's 19th Independence Day parade.

Half a block down the street, Juan Valencia, a mechanic who came to this country from Spain 20 years ago, was also reflecting on the holiday's meaning.

"I feel patriotic -- this is my country,2 he said. But he said that in Spain, the emotion had seemed stronger to him. "You feel things differently here, not as deep . . . perhaps because the country is so cosmopolitan," Valencia said.

Takoma Park is cosmopolitan in nature. According to police statistics, the population of about 20,000 is roughly 5 percent black, 5 percent Spanish and 5 percent natives of other foreign countries. It is aslo a changing community; high-rise apartments proliferated here in the early sixties and now house about a third of the population.

But the 93-year-old town retains a strong religious influence -- it is the world headquaters of the Seventh-day Adventist church -- and enough civic spirit to have organized the annual parade this year, raising the $5,000-6,000 cost from door-to-door soliciting and backyard sales. The parade, a two-hour procession of marching bands, costumed children and floats emblazoned with local merchants' names normally draws about 5,000, but yesterday attracted nearly twice that. Because of the gas crunch, "people aren't going anywhere this year," a city patrolman said. Kathleen Ellison

Would-Be Picnic

Three would-be participants in Howard University Hospital's annual July 4 picnic and softball game spent yesterday morning watching bags of hot dogs, hamburgers, chicken and beer ordered for an expected 300 guests. At 11 a.m., they were still alone in the large area that was reserved last January.

As the rain began, Charlie Hill and his wife, Barbara, said the picnic had been planned with no alternative in-door location. "Maybe we'll just stay out in the rain and boogie awhile," Hill said, glancing at two not-yet-connected six-foot speakers a few feet away. Margaret Shapiro

Religious Celebration

For Jan Donaldson of Gaithersburg, yesterday's Honor America Day program on the west steps of the Capitol was part of the first Fourth of July she had celebrated in Washington.

"I wanted to hear Billy Graham," she said. "I wouldn't have came if it hadn't been this type of program."

Donaldson, who works for a pharmaceutical firm, was among 12,000 -- many of them church goers -- who gathered for a religious and patriotic program featuring the Rev. Billy Graham, sponsored by the American Historical and Cultural Society Inc. It was the finale of a 21-day Salute to America.

"We are living in a time of crisis," Graham told the crowd gathered under threatening clouds. He mentioned the SALT treaty, the energy crisis, the Southeast Asian boat people and the recent DC-10 crash in which 275 people were killed.

There is a "a growing moral and spiritual void in the country," Graham said. "We need to make a declaration of dependence on the qualities of our past. We need to declare our dependence on each other. . . Let us declare our dependence on God. Athelia Knight

A Memorable Climb

Carderock's rock climbing area, just outside the Beltway off Canal Road, is the Washington area's Matterhorn.

Kevin Jackson, a 20-year-old carpenter, climbed it yesterday for the first time. He started off at the base of a 45-foot granite rock face in a slight drizzle.

By the time he was five feet from the top, it was pouring.

"I can't hold on anymore," Jackson said. "I don't have any grip left. I'm so tired."

But he regrouped, found a toehold and pulled himself over the top.

"I don't think I'll ever forget this Fourth of July, he said, hands quivering. Denis Collins

Land-Locked Patriot

At the Columbia Country Club in Chevy Chase, near the three new pools that opened this summer, people talked of patriotism, sacrifice and suffering.

"I'm sitting here suffering because of the stupid government we have -- if you could call this suffering," said an accountant from Kensington.

If not for the gas shortage, he said, he would be out on his 24-foot boat near Edgewater. "Without gas, it's no day."

"I haven't used my boat so far this year. It's not worth fighting about," he said. "I'm going to use it Saturday and Sunday. The tank has some gas from last year, enough to go out twice. What happens after that, I don't know."

He said his predicament was the fault of the "stupid government. You don't win friends and influence people by insulting Arabs who've got the oil. They are going to stick it to us as long as they can."

Harry Dodson, a retired federal government employe on his way to the golf course, felt this holiday was different from others "because of the energy crisis. The people in the country are spoiled, said they are going to learn to deny themselves things they are accustomed to." Nevertheless, he said, Americans "have the resolve to come through these difficult times.

"It's a very partiotic day," Dodson said, "and the people should think of what the Fourth of July means. It means people learning to sacrifice and fight for freedom. I'm very much in favor of civil rights, but you never hear much of civil responsibilities."

An example he cited was "the litter you see. All this is tied in with discipline."

Dodson said we had discipline "30 and 40 years ago," but "we've lost it." Robin Reisig

Just a Day Off

"The Fourth of July don't mean nothing to me. It's nothing but a day off from work," Robert Holmes, 57, said.

"Ask any of these children out here, and they won't be able to tell you what the Fourth of July even means," Holmes said."The teachers in the schools don't teach the children to appreciate the Fourth of July like they did when I was coming up. Nowadays it doesn't mean a damn thing."

Keith Page, 8, said, "I don't know what it means Having fun, I guess."

"It means you shoot fireworks and celebrate the country," said David Page, 10.

"It's evident that today has lost it's glory," said James Lanier of Southeast.

"Look at the weather. There's a message in the rain, you see. Somebody's trying to tell America that it's all washed up. Independence Day never did mean anything to me. Just a time to shoot off fireworks in frustration . . . I ain't free socially or economically," he said.

"All of our leaders have either been discredited or shot down, so what have blacks to celebrate?" asked Ivan Johnson, 22, of Northwest. Edward D. Sargent CAPTION: Picture 1, For Eric Kean, left, of Newport News, July 4 was a day to happily carry the flag in a parade. AP; Picture 2, For protesters at a Lafayette Square "smoke-in," the day involved confrontations with police. AP Pictures 3, 4 and 5, Billy Graham preaching at the Capitol, left, rain-dampened picnics, below, and construction work at the Pension Building, right, were all part of the District's Independence Day. Photos by Linda Wheeler -- The Washington Post