Toward the end of his destructive march across the Southland, Union Gen. William T. Sherman arrived at this exquisitely designed Georgia coastal city in December 1864 and decided to spare it from the torch and pillaging he had visited on Atlanta and countless other towns along his route.

Instead, Sherman dispatched his famous telegram to President Lincoln: "I beg to present you as a Christmas gift, the city of Savannah."

Now, 113 years later, Savannah is returning the favor to the nation. It is providing a model of how a city can begin the process of residential revitalization, of attracting middle-and upper-income families back into its neighborhoods, without the brutal uprooting of blacks and other low-income residents now all too apparent in reviving cities across the country.

The driving force in Savannah's remarkable experiment in human-scale renewal is Leopold Adler II, an investment banker, descendant of an old Savannah family and one of those amazingly energetic leaders bringing new life to the nation's inner cities.

In the 1960s, Adler served as president of the Historic Savannah Foundation, the group that sparked the preservation and restoration of 800 structures in Savannah's graceful downtown district of square-parks, magnificent old trees, statues and fountains and homes.

But later, when Adler turned his attention to the adjacent but seriously deteriorated "Victorian District" - a 45 block area of wood-frame, gingerbread homes where slumlords had packed in low-income black tenant families, refusing to make essential repairs - Historic Savannah lofted its aristocratic nose and refused to help in restoration to help the poor.

Adler could foresee two equally grim futures for the Victorian District: continued deterioration, followed by abandonment and demolition, or a total "buy out" by affluent families. In either case, the low-income tenants would be forced out, possibly into cold, impersonal concrete public-housing projects.

And that, says Adler, wouldn't be "fair, decent or anything else. Black people built a lot of this town. Some people have lived in that neighborhood for 30 years. Yet with sensible rehabilitation, we could have a stable neighborhood - healthy for residents as well as for the rest of the city."

So Adler and his friends formed the nonprofit Savannah Landmark Rehabilitation Project. They put together a 23-member board of white and black community leaders and housing professionals. And they announced a breath-taking goal: to drive out the slumlords, to purchase and restore 600 of the 1,200 structures in the Victorian District, and then - with the help of federal subsidy programs - to rent the homes back to the poor tenants at rents they could afford.

With middle and upper-income people rehabilitating the other half of the area's homes - and many are already doing that - the result could be one of the most racially and economically diverse neighborhoods in America.

To reach that goal, Savannah Landmark has a long way to go. A visitor can witness the hustle and bustle of restoration activity in some buildings - but only a few. Refusal of needed federal assistance, either for rehabilitation costs a 3 per cent, 20-year terms, and for substantial rent subsidies afterward, could be fatal. (Should such aid fall to materialize, says Adler. "I'd just commit suicide.")

The process, in short, is incredibly more complex than launching a private housing development. But in city after city, bands of inventive public-interest community housing and economic development groups are now operating Cumulatively, they could make a big difference in urban America by the 1980s.

Many of them gathered in Savannah for a neighborhood action conference in early November. From Cincinnati's Mt. Auburn came Carl Westmoreland, prophet of a tough self-help gospel for poor communities; from Pittsburgh Arthur Ziegler, whose History and Landmarks Foundation has created minor revitalization miracles in such tough neighborhoods as the Mexican War Streets; from Boston George Morrison of the energetic Roxbury Action Project.

And from scores of communities in 35 states came other neighborhood organizers, bankers, architects, "advocacy" planners and supposedly blue-blooded arts and historic preservation specialists. It was a remarkable assemblage - perhaps the first of its king ever, suggesting alliances never though of in years past.

There was indignation at the idea that poor people, forced into impoverished center-city neighborhoods deserted by the middle class in its rush to the suburbs, might now be displaced by that same middle class returning.

There was realism - an understanding that without winning allies in business and banking circles, without skillful manipulation of federal grants, it would not be possible to induce income-generating activities into many city neighborhoods.

But above all there was intense hope and belief that middle-class pressure on inner-city neighborhoods, however much feared, creates the possibility as in Savannah itself - for the first cities in American history that are both diverse and truly viable.