WHEN THE federal government operated on a fiscal year that ended June 30, late June in the Arts Endowment was a time made frantic by a last-minute rush to get grants signed and mailed.

Nancy Hanks, the chairman, was ill in June 1974, and as acting chairman I signed hundreds of grants, Then, one morning, an immense batch arrived from our visual arts office. They were individual fellowship grants, mostly for $3,000. Each grant folder contained a summary of the project proposed in the artist's own words. I began to read them and a few left me perplexed:

"My project is a series of paintings, 10 to 15 layers of paint deep, consisting entirely of extremely subtle gradations of gray."

"The project I propose will temporarily manipulate the Chicago skyline for the period of one year."

"My project is to introduce taxidermy as a sculpture media by using painted plywood construction, dirt, sand, gravel and animals to create different environmental situations."

"My project, the Structure of Dry-Fly Fishing, is a complex video artwork on the order of a piece of sculpture."

"I have in mind several pieces involving templates of the curvature of the earth, and of monumental man-made structures. These in-scale templates would be transformed, rolled, folded or somehow distilled in order to give insight to an otherwise vast visual or conceptual order."

"The Porpoise Opera Project is an experimental project intended to function in an oceanarium's porpoise stadium; to make use of existing facilities; and to work with resident porpoises (Bottlenosed Dolphins) in an effort to plan and develop a full-length program or opera to be seen by the public and documented on film."

On reflection, I signed these grants on the ground that the projects had been endorsed by our professional advisers and that they probably would not harm the Endowment. But a further group of projects seemed to me to be more questionable. In one of them, the artist proposed:

"A loop tour of western U.S. . . . dripping ink from Hayley, Ida., to Cody, Wyo., an event commemorating the birthplaces of Ezra Pound and Jackson Pollock." Another stated:

"I will rent a ground-level studio with high ceilings and a cement floor, adjacent to a lush meadow. And to this place I will bring some friends and some strangers. I will bring Pigme, a full-grown sow (whom I have known since her ninth day), two female rabbits (who know each other and me), a buck (stranger), two ringed-neck doves (strangers), a wooley monkey, Georgina (who knows me slightly, a young boy, Brett (who knows me and the two female rabbits), and a young girl, Lavina (who knows me and Brett slightly). We will all move together.

"I will also bring those things necessary for a comfortable survival, including food and materials to use for building and maintaining nests. All of us will contribute to the creation, maintenance and change of such an environment. Once settled, we may discover that there are others who would like to join us even if just for a short time (birds, mice, people, etc.). I will record our activities so that those unable to visit and experience our situation directly will know something of what it is like. This will best be done by using portable video equipment.

"Sometimes, we will leave our place and go together to another, or bring others to us. For these events we will need a vehicle, preferably a motorbike with a large sidecar. Perhaps this communal way of life will be quite difficult. However, the educational value, for all of us, will be extraordinary."

These, and a score of comparable grants, i declined to sign. I was happy to concede that the artists were sincere and that they had been selected in accordance with our established procedures. I said simply that the applications were public information and that I felt unable to defend these projects as recipients of public funds.

My obduracy brought the chairman in from her sick bed. We met for two hours with the director of our visual arts office. He was very eloquent. In defense of the mixed menage project, he pointed to George Hicks' beloved paintings of "The Peacable Kingdom." Our artist, he explained, was a contemporary George Hicks, working in the style of the late 20th century in which art works, instead of being painted, are acted out as life itself. As to the other projects, they were the linear descendants of the great Marcel Duchamp, who, when he moved to New York, brought with him a bottle labeled "Paris Air." Pressed for further details, the director spoke of a well-known Italian painter who bottled his own excrement and sold it for a high price as "Excrement of the Artist."

I was speechless; I still declined to sign the grants. They went out anyway, most artists will be glad to hear. From then on, in applying for fellowships, visual artists were asked only to submit endorsements by their peers and transparencies of past works. What they would do with the fellowships was held to be their concern.

In April 1971, the Corcoran Gallery mounted a massive exhibition of the works of Alexander Liberman, a well-known artist. "What energies inform his extraordinary balance?" asked Thomas Hess in the catalogue prepared for the exhibition. "What dialectic has enabled him to synthesize so many contradictions?" Our questions were more prosaic but every bit as hard to answer.

The exhibition was made up of many large paintings and a number of metal sculptures. Some of these were too large to install inside the Corcoran. So, one was placed in the park across 17th Street and another on the corner facing the ornate building that houses the Executive Office of the President.

The work that was placed on this corner was 28 feet high, 29 feet long and 26 feet wide. It consisted of vertical and horizontal cylinders, a bent form resembling a smokestack, and three girders joined in a triangle, all painted red. It was titled "Adam," and its companion piece was "Eve."

Normally, "Adam" and "Eve" could have looked forward to an uneventful spring in the nation's capital. But it so happened that when President Nixon rose from his desk, as he frequently did, and strolled on his lawn, his eye was drawn to "Adam." It interfered with his concentration and he was, to put it midly, displeased. In forceful language, he directed that "Adam" be removed from his view.

It was no simple assignment. "Adam" was too big to be dismantled and carted away under cover of darkness. It could not be returned to its creator without the consent of the Corcoran's director and its trustees. To temporize was the obvious recourse of the bureaucrat. But the president was not joking and the exhibition was scheduled to remain in place until June. Conceivably another city could be induced to ask for it. But any hint that it was being nudged on its way would hit the front pages of the press once its origin was known. And it was clear that it would help neither the White House nor the arts.

Logic pointed in one direction: A superior site would have to be found for "Adam," and the move would have to be justified as a significant step forward for the arts.

Was the solution to be found in one of the nation's parks? We called George Hartzog, a one-time preacher, a former director of the Park Service and a politician, first, last and always. Nancy Hanks explained in her most engaging manner that we had one of those problems which were, in essence, opportunities. George understood. He called the superintendent of Capital Parks West, "An emergency has arisen," he said. The superintendent was waiting for us outside his headquarters, he stuffed us into a jeep. We were taken on a rapid tour of the Capital Region. We ended up on Hains Point, a promontory of East Potomac Park. There we stood on a greensward bordered by lofty trees and by the blue waters of the Potomac. "Adam," we agreed, could not ask for a finer home.

We hurried back to typewriters and telephones. Moving "Adam" from a noisy street corner to a rustic setting would, we argued, greatly enhance his stature. In addition, it would be the first step in a developing campaign to place important works of art in all of our national parks.

The director and the trustees of the Corcoran, the director of the National Park Service, the secretary of the interior and the artist himself were all taken aback by our sudden enthusiasm. But they rallied, and supported us. Permit Number 6:800:253 was issued by the superintendent. A crane was rushed to Washington with a crew and a supervisor equipped with some brush-up paint. On the afternoon of July 3, the Washington Star carried a large photograph of the work in its new setting with the happy caption: 'Adam' All Set to Summer in the Park."

A little later, on a warm summer evening, President Nixon invited a few advisers to join him on the Sequoia for a cruise down the Potomac. He sat on the deck, watching the shores of East Potomac Park glide past. Then, through the greenery of the trees, a flash of red metal caught his eye. "What in the hell is that?" he demanded to know. "It's 'Adam,'" said Leonard Garment. "We all think he looks very well in his new setting." The president nodded, as the Sequoia glided on. "Well," he said, "it's better there than where it was before."

Now, "Adam" is back in the city, a red glob huddled against the marble of the National Gallery of Art.

"Censorship," an historian notes, "was the greatest danger faced by the Federal Writers Project." It hastened the end of the project, which came into being in 1935 and lasted only five years.

The American Guide Series was the major achievement of the project. Some of its volumes were censored by project administrators, others were published and then denounced. A Missouri volume was held up when the relative of a leading citizen was identified as a bank robber. The Connecticut and New Mexico guides ran afoul of labor conflicts. The Idaho Guide led to bitter political vendettas. The Massachusetts Guide enraged the state's political leaders by its comments on Sacco and Vanzetti. Former Gov. Ely proposed that it be burned on Boston Common.

The lesson of the '30s was vivid in the minds of congressional liberals when they established the Arts Endowment and the Humanities Endowment in 1965 as public foundations, helping others to act instead of acting on their own behalf. That general rule helped to insulate the government, but in one area it was set aside. In making direct grants to individuals the Arts Endowment made itself responsible for thier works. Sooner or later the issue of responsibility, and therefore the threat of censorship, was bound to arise.

In 1972, when the Arts Endowment announced that $300,000 would be made available in fellowship grants of $5,000 each to playwrights, novelists and poets, 1,566 writers applied. Among them was an Erica Jong.

On May 15, 1973, a form letter went out informing Jong that she had been awardded a grant. Among the instructions was a directive that she acknowledge the endowment's aid in the event her work was published. Jong agreed, and she kept her word. The first page of "Fear of Flying" thanked the endowment for its help in funding the novel. The next page listed the title of Chapter One: "En Route to the Congress of Dreams, or The Zipless F -- -."

"Fear of Flying" was a best seller in 1974, and many who read it noted that it was written on a federal fellowship and wrote to their representatives in Congress to protest. Not long afterward, the appropriations commitees were being asked to go to the House and Senate with recommendations for a substantial increase in the Arts Endowment budget. At the same time, the outcries about "fear of Flying" were mounting.

"Public Paid for 'Horny' Novel" was the title of a nationally syndicated column by John Lofton Jr. "If some dizzy dame or guy wants to write about her or his most intimate sexual feelings," he said, "why should you and I be stuck with the tab for these ravings from a restroom wall?" His simple solution was to abolish both endowments, and he gained a hearing. Republican Rep. Robert Bauman of Maryland, author of an amendment which curbed the National Science Foundation because of sensitive grants in the social sciences, placed the column in the Congressional Record. "It may be," he noted, "that NSF is not the only agency which should be the subject of closer scrutiny by Congress."

Letters from Republican Sen. Jesse Helms of North Carolina also suggested that he was cranking up for the debate. Responses from Nancy Hanks didn't satisfy him at all. What, then, was Helms to do?

James P. Mcclelland, a Helms aide who had prepared a lengthy brief attacking the panel structure of the NSF, was ready to prepare an even stronger brief on the Arts Endowment. But he said it would take him 30 days. Sen. Helms looked at Mclelland, who was his only legal assistant. He looked at the piles of raw legislation on his desk. He thought for a moment, then: "The hell with it!" he said.

Meanwhile, in the House, Nancy Hanks took the problem to Rep. Sidney Yates, chairman of the appropriations subcommittee that handled the endowment. He listened quietly and then said: "Leave it to me." When the time came for the endowment to be considered by the House, "Fear of Flying" was never mentioned. Without objection, the appropriation for the arts was passed by a 2-to-1 vote.

If the story had a happy ending, did it follow that the fellowship programs were sound? In pressing for those programs, the endowment set aside its principle of assisting others to act rather than acting on its own to sponsor works of art. It also set aside its determination not to be a predominant source of funding in any project. It had to oppose censorship, once the threat of censorship was raised. But was Sen. Helms altogether wrong? In "Murder in the Cathedral" T. S. Eliot has Thomas Becket say: The last temptation is the greatest treason: To do the right deed for the wrong reason.

That seems to me to be a confusion of politics and theology; but I wonder if, in asking the congressmen to set aside their fear of "Fear of Flying" we were not doing the right deed for the wrong reason.