Floyd McKissick is still a militant.

"No, I'm not going to give up on Soul City," he said, the day after the Department of Housing and Urban Development announced there will be no more money for his struggling new town here in the North Carolina hills.

"The way this was done, it's like cutting off a man's hand and then condemning him because he can't pick up anything," McKissick said.

Fighting words, the kind that made McKissick famous in the early 1960s. He was among the first to call for black power, a slogan that, when screamed by a clenched-fisted Stokely Carmichael, either fired your blood or chilled it.

Now McKissick is 57 and graying, with a slight double chin prospering above his conservative blue suit. The battle to get service at the dimestore lunch counter is over, and McKissick now is serious about getting a sewage treatment plant.

Everything, he says, may depend on whether the plant gets built. With it, Soul City might finally be able to attract some industry to the gleaming steel and glass Soultech I building -- industry that said it couldn't come until there were sewage facilities, firehouses, schools, stores and paved roads out here in the red-dirt wilderness. Industry would mean jobs, and that would mean that the people would come, the people in McKissick's dream when he first got this idea back in 1940s.

Without the sewage treatment plant, everyone agrees, it is all over. Soul City Co. will fold. The government will take over the company's 3,600 acres and try to resell it, some say for as little as $850,000.

"People have invested their lives in this place, much more than their money," McKissick said softly as he took a visitor around the clumps of little bungalows off Liberation Road. "That's what just kills me . . . . we just can't let it die."

A blue fire hydrant sits near in squat green electric terminal box and a water main cover at the edge of a soybean field. "Well, we can't just let it lie idle while we're waiting for the houses," McKissick said.A sign says Pleasant Hills subdivision, but the hills roll empty toward the distant trees, blue with mist. There are street signs, but there are no streets.

"There ain't nothing much there, never has been," summed up Sarah Thompson, 72, who lives in a small, tarpapered house less than a mile from Soul City's entrance on Route 1.

"Only thing different now is the doctor's there . . . . he's colored but he's a nice doctor." Many in Warren Country, near the Virginia border and ranked the second-poorest country in North Carolina by a state study last year, have taken advantage of Healthco, Soul City's low-cost medical care operation.

"We were hoping that industry would come in and raise the wages around here," said Linda Creech, one of Thompson's seven daughters "but nothing happened."

"Everybody was afraid of it to start with . . . . we thought all the blacks would come back from up north . . . . but there's not many of them. I don't know where they spend their time. It's like a little foreign country. We don't see much of them.

Last Dec. 31, Soul City counted 135 persons in 33 houses. All except 30 residents are black. That does not include the 600 or so persons that McKissick said come to live on the fringes of Soul City to take advantage of its roads, its electric service and its future.

The future in the early days meant 1979 -- the year by which McKissick said Soul City would have 18,000 residents.

"The roots of the urban crisis are in rural people seeking to leave areas of economic and racial oppression," he said a decade ago, in making that prediction. "by building a new city in a rural area, we can help to solve this."

At the height of the hopes, in 1974, when the first $5 million in bonds were sold and bulldozers were everywhere, Janice Crump, a Delta Airlines reservationist, her homebuilder husband Maurice and their three children left a comfortable life in Atlanta to move into a Soul City trailer surrounded by mud.

"We were real pioneers. We were the last ones the county would restore power to after a storm . . . . those were probably the hardest years of my life."

They had come, she said, because "we saw more than the fields and the dirt roads and the mud. We saw a promise of what could be." Most of the other early arrivals also came from the cities: Cleveland, Detroit, Houston, New York. Most worked then and still work on the Soul City Co. staff.

A month ago, the Crump family moved from their trailer into three-bedroom home they designed and built. Like all the Soul City houses, it could be in any Washington subdivision, complete with scrawny saplings and a lawnless dirt yard. Crump thinks it is worth about $150,000. In Warren Country that is very much indeed.

If Soul City folds, however, Janice Crump will lose her job as Soul City's recreation association director. "We live on Maurice's income, so we'll be all right," she said. "it's Mr. McKissick and the other top executives who will suffer."

No one here will say a word against McKissick. Even the HUD task force report that led to last week's action had no criticism of him, saying the project's apparent failure "in no way reflect adversely on the capability of the developer."

At least four audits, including one by the General Accounting Office that halted all operations at Soul City for 18 months, were ordered by congressional critics and others, and all gave the project a clean financial bill of health.

After those audits, news reports on Soul City began to focus more on the project's problems than on its hopes.

"Why should anyone care how I spend my own money?" McKissick asked angrily after one report on his lifestyle. "That big house is partly to create land values . . . partly to put up our important visitors. We don't have no hotel here."

If he named the Magnola-Ernest Recreational Complex pool after his parents, he said "Who the hell else should I name it after?" Relatives of his who work here all have graduate degrees in their fields, he added, and his own $70,000 salary is below that of many North Carolina executives.

The villians in the Soul City story, McKissick said, are Washington bureaucrats. Government officals would approve road construction funds along before they approved the design, he said; they would require a shopping center before freeing housing money and then hold the housing funds because the center was mostly unoccupied.

A deal was engineered in which Soul City would pay the state of North Carolina $62,000 and receive $162,000 worth of roads because of the state's lower wage laws. HUD decided the agreement made North Carolina a government subcontractor, meaning the state would have to pay union scale. The roads remain unbuilt.

"I have hundreds of examples," McKissick said.

"if we were the only New Town Program city to fail, it'd be different," said Soul City general manager Gordon Carey, "but eight of them have been scrapped now. The government just hasn't figured out how to cope with the real world problems of creating something new."

And now -- with the water and the electricity and the roads and the street lights and the leveled land all ready, with only that sewage plant needed to complete the groundwork that a city needs to grow -- now the federal government wants out, McKissick said.

He noted that HUD action is not a foreclosure because Soul City has not defaulted on anything. There is $8000,000 in the bank, enough to pay the interest for a while on the project's $10 million in debts. The big repayments don't start until 1983, and if the sewage plant goes in there is still hope, McKissick insistes.

His lieutenants are already working the phones, trying first to make sure HUD does not pull out of the $4.2 million sewage project, which would benifit the surrounding area as well as Soul City. The black community network has worked political magic before, and McKissick will try to do it again.

"I'm a fighter," he said. "I've just got to fight this." CAPTION: Picture 1, McKessick talks with two of Soul City's 135 residents, Margaret and Lorenzo Harris; Picture 2, Soul City's unfinished fire station may never be completed after HUD decided to phase out federal support for the "new town" that is McKissick's dream; Photos by Michael O'Brien for The Washington Post