Four years ago, D.C. City Council member John Wilson was running scared. Mayor Walter Washington's handpicked candidate was waging a vigorous and highly personal campaign to unseat Wilson in the Democratic primary for the Ward 2 council seat. Wilson came back to win, by a margin of nearly 3 to 1, but the campaign left him personally in debt.

This year, John Wilson is running rich. He is the Council's $60,000-man, running unopposed in the Sept. 9 Democratic primary with more money than he says he will ever be able to spend.

Spending the money is not one of Wilson's problems so far.In fact, he has managed to spend more than $35,000 -- more money than any other candidate has been able to raise this year, including those running citywide. Wilson's expenditures include:

$1,967 for 200 personalized paperweights, with Wilson's seal on one side, to give out to major contributors and campaign workers.

$201.60 to rent a fan for his campaign office.

$346.50 per month for renting a car for his campaign manager, Albert Elliot.

$5,250 to the Peter D. Hart Research Association for a poll of his ward and the city.

"Five years ago, if you told me we'd be running in the Sept. 9 Democratic primary, spending money just to convince people to come out and vote and doing some research on our ward, I would have laughed and said you were crazy," Wilson said.

"The first election (in 1974) I never thought we'd win it," Wilson said. "The second election, I ran terrified." This year, Wilson said, "We'll just do everything like we've done it before. tWe're running for Nov. 4."

Wilson's opponent in the general election will be Republican Ann Kelsey Marshall, a 29-year-old former congressional employe and freelance song-writer, who also is unopposed in the Sept. 9 Republican primary.

Marshall, a former administrative deputy to Sen. Richard G. Lugar (R-Ind.) is attacking Wilson on the issue of the city's budget, and what she calls the incumbent's "freewheeling" chairmanship of the council's Finance and Revenue Committee.

Marshall is advocating an overhaul of the city's tax laws that she says are driving out both businesses and the middle class. She also points to what she calls an irony, in that the Washington business community is supporting Wilson, the Democrat, while business leaders elsewhere traditionally have favored Republicans.

"I don't truly believe that the business community, which has flourished, wants to risk some newcomer to the political arena," she said.

Marshall said she realizes that she is like David, campaigning against a well-funded Goliath. She has raised only $515 so far for her campaign and she said she has three added disadvantages: "One, that I'm white, two, that I'm a Republican, and three, that I'm a woman, or to sum it up in current lingo, I'm a Republican white honky broad."

Ward 2, like the rest of the city, is predominantly Democratic, and even Marshall admits that Wilson, 36, is the odds-on favorite to win reelection.

"People say we don't have any serious competition," Wilson said. "I see all competition as serious. I don't see it (the campaign) as over until we put our hand on the Bible and take the oath."

This year, the lack of a primary challenge and the abundance of funds have meant changes from Wilson's previous, cash-strapped campaigns.

For instance, this year Wilson's campaign committee was able to pay to have T-shirts printed bearing the reelection message. In 1976, when Wilson last ran for reelection, the committee had to buy the T-shirts and have Wilson's wife Bonnie silk-screen them by hand.

Another difference: "This time, the brochure is paid for," Wilson said, proudly unveiling a slick blue-and-white leaflet with the campaign slogan, "Because He Cares."

"We'll probably have money left, at the rate we're raising it," Wilson said. "I go get the mail, and there's money. Most of it is unsolicited. We're just amazed every day."

Wilson said he himself is dismayed at the high cost of local political campaigns, particularly in Ward 2. "Most of the people live in high-rises, and you can't solicit in the buildings," he said, "So consequently, you have to do a lot of mailings, and mail costs money."

Wilson's ward is the most diverse section of the city, surrounding the downtown area and stretching from the slums around the H Street NE riot corridor, west to the posh Watergate complex on the Potomac River, from urban-renewed Southwest to Shaw, in slow transition from poor blacks to young, middle-class whites.

The ward includes one of the city's highest percentage of tenants, and practically all of the apartments that are being converted to condominiums. There is a high percentage of public housing, especially for the elderly, and some of the most expensive real estate east of Rock Creek Park. Most of the major business districts are in Ward 2, including downtown, Connecticut Avenue, and the K Street corridor.

The most politically potent constituency is the Ward 2 gay community, which is organized into two major groups -- the Gay Activist Alliance and the Gertrude Stein Democratic Club. Wilson is a longtime friend of the gay community and each year has introduced the declaration for Gay Pride Day.

In his five years on the council, Wilson has tried to balance the divergent, often conflicting demands of the many constituencies that make up the ward. The Dupont Circle preservationists are concerned about maintaining the quaint sidestreets and neatly-packed rowhouses, while the Shaw residents see business and construction as bringing much-needed jobs.

Wilson ended up siding with the preservationists, arguing that the jobs provided by the construction would not have benefited the unemployed residents of Shaw.

The rapid rate of condominium conversions presented another one of the ward's contradictions. Wilson, who long had sided with tenants organizations on issues like rent control, had consistently promoted home ownership. The risk was that when tenants' organizations bought their buildings, they might seek to evict elderly residents. At the council meeting debating the condominium conversion bill, Wilson put the contradiction in stark terms:

"You have to take a side. You can either go with the tenants' organizations or you can go with the old people. I'm going with the old people. Let the old people die with dignity. Let the old people die with a place to live. They're going to die soon anyway, you'll get your damned (condominium) units."

That shouting, arm-waving, highly emotional speech was vintage John Wilson. He admits now that the outburst was primarily designed to win council votes, which he did not have going in.

"I consider myself a skilled legislator," Wilson said. "I use whatever tactics are available to me at a given time."

Some of those tactics -- others say "antics" -- have earned him a reputation in Wilson's own words, as irrational, inconsistent, erratic, moody, distant, arrogant, and aloof. Some of his more controversial political stands -- like his support of decriminalization of the use of marijuana and his open support of the gay community -- have fueled the campaigns of his past political opponents.

This year, Wilson said he feels vindicated. He was proved correct last March, when he said the city's budget deficit was more than Mayor Marion Barry would admit at the time. He notes how most politicians now have made the Gay Pride Day block party a mandatory stopover on their itineraries.

"Most people thought I was erratic, wild, far-out in every respect," Wilson said. I think I've grown tremendously in my job -- I think I really have grown. People are finding that my ideas are realistic and not so complicated."

Wilson said that his reputation for political eccentricity may hurt him, should he finally decide to make a long-expected run for mayor in 1982. While not saying flatly that he is a candidate, Wilson did say, "I think I could do the job. I think I could do the job very well. Running a city is like anything else -- it's a crusade, man!"

Still he admitted, "I don't think I have the personality that Washington voters look for in a politician. I'm not a preacher. I'm not a lawyer. I'm not a staid, conservative black person. I'm very outspoken and emotional." CAPTION: Picture 1, John Wilson . . . "all competition [is] serious"; Picture 2, Ann Kelsey Marshall . . . Wilson's GOP opponent