The trim lawns, neat brick and clapboard houses, the basketball hoops in every other backyard here all attest to a tidy, contented community, a cliche of the American heartland.

The huge parking lot at Hempstead High School, crowded with the cars of youngsters, is awesome evidence of prosperity. "Money's good here," people say. It is.

At John Deere, the farm machine marker and largest employer in the county, the average blue-collar pay is $9.67 an hour, more than $20,000 a year. The Dubuque Packing Co., a large family-owned meat packer and second-largest employer, is forced to follow suit. Pay on the killing lines and elsewhere last year averaged $20,239.

"We have more millionaires for our size"-population is 62,000 in the city, 96,000 in the country-"than any other place in the U.S.," boasts Mayor Richard Wertzberger. He doubles as sales manager in the canned foods division of Dubuque Packing.

On the lawn in front of Hempstead High a billboard proclaims: "Good Going Superstates - Boys State Bowling Champs."

This is precisely the tone of booster-optimism that a reporter away from the United States for most of the 1970s would expect to find in an Iowa town.

It is a quality seldom glimpsed in Northern Europe, the reporter's beat for nearly eight years. There, a sense of irony, even tragedy, is far more common. The style is much more likely to be understatement and self-mockery. The Europeans, moreover, seem to have a surer sense of identity, even of class, of who they are and where they came from. They seem to feel less need to proclaim themselves and their virtues.

But just below Dubuque's surface, an appearance that Norman Rockwell might have painted, lies something else, an uneasiness, a cluster of concerns, a malaise that is startling.

People here are worried about youngsters who come to school with beer, wine and even vodka in their thermos bottles. They are disturbed by the growing number of working wives and the growing number of juvenile delinquents. They are shocked at rising divorce in a city where two of three residents are Catholic. They have trouble understanding their young who live openly together, unmarried. They sense a loss of community whose visible sign now is the concrete-neon-plastic jumble in what was once a graceful, elm-shaded town center.

Dorothea Green is 55, office manager for Dubuque's county attorney and vice chairman of the county's Democratic Party. She says:

"People are less caring about their neighbors. It used to be when there was a death in the family, people sat up all night, brought so much food you didn't know where to put it. Not anymore. People have too much going for themselves.

"He's on the night shift. She's on the day shift. Kids come home from school to empty houses. The parents-they think they're providing if they give the kids material goods."

Esther Tauke is 62, a community service adviser for the Agency on the Aging. Her son is the new Republican congressman from the 2nd District, embracing Dubuque. She says:

"Religion doesn't cut as deep, especially in the Catholic Church. When I was younger, we lived by the rules of the church. The world has become so much more secularized. TV has a lot to do with it. You see much permissiveness. I have friends who openly say their children are living with a boy or girl. It's the college crowd."

Pat Dillon is 39, and for eight years has been the president of the strong United Auto Workers Local 94 at John Deere, with 5,900 members today.

"Guys used to have pride in work," he says. "Not anymore. Sure, some older guys still worry when a younger man scratches a hood. But there's too much repetition and too many pressures on the job."

"Monotony, boredom and regimentation," he says, lie behind an increase in alcoholism at the plant. "Regimentation by the company and maybe the union. Guys feel frustrated. They look to the bottle for a source of comfort."

They also insist, says Dillon, on breaking away from their routine, on having more leisure. Saturday work at Deere earns time and a half, nearly $15 an hour. But the rank and file, he says, will no longer accept a requirement that they work on Saturday at Deere's order. Local 94 will make as a major bargaining demand this fall the right to choose whether to work Saturday, even at the premium rate.

In Coventry, in Birmingham and other British industrial towns this sentiment is understood. British factory workers are staging their own quiet rebellion against dull labor, so British industry is the least productive in the European Common Market. British unions slow down assembly lines, insist on five men for tasks that three could perform. Like the Deere workers, they are sacrificing income and its command over goods for leisure. The difference lies in the British worker's demand for leisure on-not off-the job.

The concerns of Dubuque-the erosion of the work ethic; a decline in neigboliness; alcoholism and unmarried couples-would never have been painted by Rockwell. They surely are not what Harold Ross had in mind when he dismissed the place as the quintessence of provincialism. His New Yorker magazine, he proclaimed more than 50 years ago, "will not be edited for the little old lady from Dubuque."

Now, jets and television have so narrowed the distance that Dubuque can tease the New Yorker. Fifteen years ago, the town named its civic greeter, Mrs. Delbert Hayford, as "The Little Old Lady From Dubuque." The magazine even has 113 subscribers in the city.

Even in 1925, this Mississippi River town was notable. The descendants of German and Irish immigrants, brought over to work the lead mines in the early 19th century, were not about to give up their traditional wine and beer for an absurd national Prohibition law. Taverns ran wide open, colleagues of Al Capone kept a genial eye on the proceedings from the fourth floor of the Julien hotel, and City Island, lying between the Illinois and Iowa banks, became known as "Ginmill Island" in honor of its chief industry.

When Iowa went dry in the 1960s, Dubuque continued to go its own way. At the country club, a leading member recalls, an annual payment of $1,000 assured advance word of any raid, keeping the bar open.

But now alcoholism has become so visible a menace at all age levels here, organizations have sprung up to combat it. At the Deere plant, management and the UAW run a joint committee to spot workers with drinking problems.

The files are confidential, but Dillon acknowledges that more than 100 a year on the assembly line are gently urged to seek help.

They might consult the Tri-County Alcoholism and Substance Abuse Board. One of its nine volunteer members is John Walsh, who speaks with the passion of a convert. Youngsters, he says, have turned from drugs to drink because "it's easier to get ahold of and cheaper."

"It's a macho thing here," he says. "You sit and talk about how stoned you get."

For the county as a whole, Walsh estimates 8,000 persons-one in 12-need alcohol to get through the day.

"It's been here for years and years," Walsh says. "It's become more intense with the young."

Walsh comes by his zeal naturally. At 26, he was the youngest senator in the state legislature. Six years later, he had lost his political career and his wife because he couldn't control his drinking. Walsh is now 39 and runs a successful firm counseling management. He will not take even a social glass.

Through all these conversations in what is still a friendly town by day (Mayor Wertzberger says old people are rightly fearful now of walking alone at night in the South End or on Central Avenue), where strangers are likely to be greeted with "Hi," is a single, insistent theme: The breakdown in values is somehow linked to inflation, the breakdown of money as a store and measure of value.

Robert Kehl, who began with a restaurant-"Roberts Smorgastable" and a Mississippi cruise boat-"Roberts River Rides"-to become one of Dubuque's most successful real estate operators, talk of the corrosive effects of ever-rising prices.

"You can't retire. And what are your savings worth. If you're in the rat race, you're OK. But you can't afford to get out. You've got to get into something that's with it. Like real estate. The dollars in the bank are no good. People, they're living better than they ever lived in their lives. But there's no good solid base anywhere. They're just waiting for it to blow. There's no control. Everything's going wild."

His wife Ruth, counts the change in her neighborhood. Thirteen years ago on Oeth Court, she remembers, four wives worked. Today, there are 22, partly to live up to their $100,000 homes, partly out of boredom.

Almost alone, Dillon, the union leader, defends the rising number of women in offices and even factories. "It means opportunities for their kids like college, they couldn't have in the past."

But Doris Hintgen, who sits on the board of the county's Social Services Department, says her agency is receiving many more calls complaining of neglected children. She blames it in part on mothers worn out by the demands of jobs.

Statistics support the view that the social fabric Dubuque is fraying. In the past five years, the county's juvenile authorities have seen the number of cases sent to them annually rise nearly 60 percent, from 769 to 1,213. To be sure, this total includes relatively harmless matters like truancy. But a substantial share is theft, drug and alcohol misuse and, lately, armed offenses.

At the Dubuque County Courthouse, the number of divorce cases on record there has risen steadily for 10 years. In that decade, it has more than tripled, from 95 in 1968 to 304 in 1978.

In a pleasant, pillared home for retired priests, Msgr. Anthony Sigwarth chomps on a cigar and beams at the plaques given him by grateful civic groups. He recalls the successful fights he led to save neighborhood communities threatened with developers' "improvements." He remembers with glee how he stopped one architect from putting eight-story high rises into the Washington neighborhood, a place where "people had their feet on the ground."

Somehow, Sigwarth was looking the other way when urban renewal planners put down a concrete pedestrian mall in the heart of Main Street. There are still two gaping, blocksquare lots, cheerless and unwanted.

In Social Democratic Scandinavia and Britain, the same plaint is heard. Handsome, state-subsidized high-rise apartments in the suburbs of Stockholm and Copenhagen are much cleaner and roomier than the old brownstones of the workers' quarters. But they are also antiseptic, boring and somehow less satisfying. This is why Denmark's premier, Anker Jorgensen, almost a politician by accident, refuses to move from the worker's home where he grew up.

In Britain, the tower blocks of urban renewal have cut off family from family, encouraging a spiteful, Clockwork Orange hostility that breeds vandalism and crime. The National Front, a British equivalent of the Ku Klux Klan, flourishes in these soulless structures. In contrast, the grim rowhouse ghettoes of Belfast, Protestant and Catholic alike, keep their people despite the violence of the town. Each street is a neighborhood where mothers can keep an eye on each other's children, where there is comfort from neighbors when the man of the house is "lifted" or arrested.

Sigwarth's biggest regret is the Kennedy Mall, a huge concrete parking lot bounded by concrete boxes that sell things. Three miles west of the town center, the mall is grim but convenient, another lure pulling people from a center, an agora, the cements community.

"It all militates against neighborhood," says Sigwarth. "It means less neighborhood and more flux. People are by themselves. They don't socialize."

Sigwarth, however, is not simply a man of 77 who sees all change as perverse. He also remembers when German youngsters in his parish fought pitched battles with their Irish neighbors, when Lutheran preachers regularly denounced Catholics in "stemwinders" from their pulpits.

But all this has changed. "Religious prejudice in this city is dying down," he says, and it is hard to find disagreement.

Priests and ministers now preach in each other's churches and hold combined prayer services. Catholic, Lutheran and Presbyterian seminarians share a common library and take some courses together. Dubuque's Lutheran, Episcopalian and Catholic clergy are discussing a common form of communion.

Even so, a Dubuque booster such as Mayor Wertzberger acknowleges, "Something's gone wrong here. I can't put my finger on it."

Dillon of the UAW is almost alone in proposing answers for problems, in trying to curb malaise through a bargaining contract.

He wants to make the factory "more comfortable and more productive. If all you do is spin a lug, you don't have to think about the job, you don't give a s---, to hell with it."

"But give guys responsibility and they'll meet the challenge."

Dillon describes the changes he seeks. A major innovation would organize workers in teams of six or so, all laboring on a single assembly or unit of a tractor. Each could then take turns at a different task and all might gain a sense of achievement, of completing a finished whole. More modest proposals would fill the factory with music, provide a barber shop and small post office, set up vending machines for newspapers, sandwiches and the like.

He is interested to hear that Volvo, the Swedish auto maker, has tried to humanize a factory in the provincial town of Kalmar. Volvo, like Deere and the auto companies in Detroit, has been plagued with absenteeism and quits. Even at high wages, Swedish workers will not stay put on an assembly line.

The Kalmar plant abolishes the assembly line. An entire unit, for example an engine block, rides on an electrically driven pad to a team of workers. They decide what job they will perform and rotate the tasks among themselves.

The Kalmar plant is clean and brightly painted, bound by picture windows, filled with rock music but otherwise quiet. Dilon, however, is disappointed to hear that so far it has made only a marginal difference to workers' attitudes. Absenteeism is slightly better than Volvo's average elsewhere; productivity is about the same. Swedish workers say that a factory is still a factory, that a choice of 12 dull jobs is not all that much better than doing one. The UAW leader, however, is not easily deterred and will push his ideas in unio gatherings.

Dubuque's biggest booster should be its most powerful man, Robert C. Wahlert. His family owns the billion-dollar-plus meat packing concern. At 66, he is erect, a white-haired, white-goateed patriarch, ordering-not soliciting-a customer over the telephone to New York.

In one breath, Wahlert says, "This is the best goddamn city in the U.S." But in the next, he remembers that it was "a pretty town," with the elms softening the romantic, Grant-era mansions on Locust Street and elsewhere. Now, he complains, cars have taken the place of elms and it is not as pretty anymore.

"I still think it's the best damn town in the U.S. I raised four kids here."

Then Wahlert recalls that two of his sons are getting divorced.

"I raised 'em as Catholics, sent 'em to Catholic schools. It's unbelievable. I can't understand it. I don't know. I don't know."

"My sense of values are confused-to say the least." CAPTION: Picture 1, Working at John Deere, largest employer in Dubuque: A union leader calls it "monotony, boredom and regimentation."; Picture 2, Main Street in Dubuque, where inflation is eating at social values.; Picture 3, A sign of prosperity in Dubuque is a high school parking lot packed with a utomobiles driven by students. "Money's good here," people say, and it is; Picture 4, Sigwarth: There is "l ess neighborhood and more flux. People are by themselves.; Picture 5, UAW leader Dillon: "There's too much repetition and too many pressures . . ."; Picture 6, Mayor Wertzberger: "Something's gone wrong here. I can't put my finger on it." Photos by Jon Jacobson for the Washington Post