The avenue between the Capitol and the White House nowadays is busier with new construction than at any time since the Federal Triangle was under way half a century ago. At long last the small-town aura of the post-Civil War era is disappearing under the aegis of the Pennsylvania Avenue Development Corporation.

The monumental Federal Triangle project swept away all the old structures on the south side of the avenue save the Post Office, now being handsomely refurbished, and the District Building, of uncertain fate. The north side, the object of PADC's current efforts, will be a mixture of periods and styles rather than a repetition of the neoclassical structures to the south with their columns, ornamental entrances and pediments.

We shall have to wait to see what harmony, if any, evolves from the changes on the north side. But one change that can hardly fail to improve the avenue will be at the northwest corner at John Marshall Place, a block-long street long ago known simply as 4 1/2 Street.On that sit the Canadian government will build its new chancery. It will be the first, and probably only, diplomatic establishment on the avenue.

When the government moved to Washington in 1800, Congress met only a few months each year and the bulk of the members, and a good many government clerks as well, lived in boardinghouses along the avenue. In pre-Civil War decades, Elizabeth Peyton ran a "select boardinghouse" on what will be the chancery site. Among its boarders were Chief Justice John Marshall, Henry Clay and John C. Calhoun. The building was remodeled, apparently around 1855, and beginning in 1849 became Fritz Reuter's restaurant and rathskeller. A 1901 Reuter ad boasted of "80 elegantly furnished rooms -- 40 with bath -- telephone in every room. Electric elevator." And "table d'hote" cost 59 cents, "equal to any dollar table d'hote in America."

George Rothwell Brown described Reuter's as a "memorial to the small hot bird and the large cold bottle, to terrapin, and to the broiled live lobster." Reuter's rival was Harvey's, on the south side of the avenue at 10th Street. Next door to Reuter's stood the city telegraph office until 1869; in an upper room was the first office of the original Associated Press.

Across the street, between 4th and 7th Streets, where the National Gallery stands today, was an elegant gambling establishment called the Palace of Fortune. And in a thirdfloor room of another building lived Walt Whitman for a time in 1864. About where the Mellon fountain is now, there once stood the St. James Hotel, earlier known as Bunker's Hotel. At Brenner's hotel, now the site of the gallery's new East Wing, lived Chief Justice Roger Taney, who succeeded Marshall.

Gradually, however, the lower avenue declined as the city grew and its center moved westward. The area around 4 1/2 Street became Washington's Chinatown, full of laundries, curio shops and restaurants. The original buildings on the gallery site gave way to the Baltimore & Potomac Railroad depot, jutting into the Mall, and there President Garfield was fatally shot in 1881.

By the 1920s Chinatown had its Tong wars and Prohibition produced the bootlegger. On a February evening in 1924, Sen. Frank L. Greene, a Vermont Republican, and his wife were walking down the avenue from the Capitol. At John Marshall Place they found themselves in the midst of a pistol duel between a revenue agent and a suspected bootlegger; Greene was hit in the head by a stray shot. He survived.

Most of the current crop of Washingtonians remember the northwest corner of the avenue and John Marshall Place as the site of a box-like, six-story structure that beginning in World War II housed the United Service Organization. But the building, which has just fallen to the wrecker's ball and bulldozer, was erected for the Ford Motor Company as showroom and offices in the heyday of the man who put the world on wheels.

The auto emporium's most memorable day was Dec. 2, 1927, when 37,156 Washingtonians stood in line in the rain for the opportunity to go behind the big plate-glass windows to see and touch the marvel of the age, Ford's new Model A.

Rothwell Brown dubbed the building "Henry Ford's concrete monument to tin." The shiny Model A, successor to the original Model T (the true "Tin Lizzie"), sold for $385 for the roadster with rumble seat and up to $570 for the "Fordor" sedan. That opening day in Washington, and others around the nation, proved Ford could still do it, and it saved his company from disaster.

With the Great Depression came the Bonus Army, jobless veterans of World War I demanding federal money. Part of the army encamped in shacks where the National Gallery's East Wing now stands. President Hoover considered many of the 5,000 vets either communists or common criminals and ordered Army Chief of Staff Douglas MacArthur to drive them out of town. There is a famous photo of MacArthur, with his aide, Maj. Dwight Eisenhower, nearby, standing on the north side of the avenue, about at John Marshall Place, to direct the action. The fire and smoke from burning shacks framed the Capitol in pictures sent around the world.

At one point the District intended to replace the Ford building with a new central public library; all that was built, however, was a wing next door. This too, has just been torn down, leaving only the local employment security building (which will remain). Eventually, the hope is to turn John Marshall Place into a pedestrian mall. Behind the chancery site is the new District of Columbia Courthouse; to the east is the U.S. Courthouse.

Canada estimates the cost of the land and the new building at around $20 million, but inflation doubltless will increase that figure. No architect has yet been chosen, so the chances of starting construction in early 1981 as planned may be rather slim. Completion is scheduled for 1984.

The 300 or so Canadians who will work there will look out at scenes of beauty, order and serenity. It was not always that way on that corner, so long so full of life and its dramas.