This mountain coal town is slowly dying, literally disappearing under the advancing hillside vegetation that has reclaimed most of what was once a bustling city of nearly 15,000 coal miners and their families.

Only 2,300 people remain. And nearly two-thirds of the homes have been torn down in the town built, owned and operated for almost 80 years by the United States Coal and Coke Co., now called U.S. Steel Corp.

Bulldozers and underbrush have erased not only company-built housing, but also the company stores, theater, pool hall, restaurant, bar and several churches in a city where neighborhoods were named for company supervisors and Gary itself was named for a former U.S. Steel president.

"Gary was once a modern, ideal community. There was a lot of good money made here and a lot of good families raised here . . . . But I'm afraid we may be the last generation," said Mayor Ronald Estep, 36.

Estep manages the McDowell County Vocational-Technical Center, where he said he reluctantly counsels young people, "If you want to make a living, if you want to do something with your life, there is not a whole lot of future for you here. You gotta leave . . . . It hurts to say that, but it's the same thing I'm gonna tell my own kids."

Gary, like other southern West Virginia towns, is dying because it depended on steel. U.S. Steel and other firms make about 60 percent as much steel as they did when the mills were booming, according to industry data. More than 25 percent of the steel in the United States now comes from Japan, Brazil, South Korea and other sovereign countries.

Less steel means less need for coke, an essential steel-making ingredient. Less coke means less need for metallurgical coal, "met-coal," the high-quality industrial coal that drew thousands of European immigrants and southern blacks here since the early 1900s.

Less met-coal means fewer miners, and Gary's younger people are leaving these hills in droves, migrating to North Carolina and elsewhere in search of jobs.

What is happening now to Gary is an extreme but not isolated example of the ravages caused by the widely rippling effects of the decline of the basic industries of "smokestack America."

To many poor and jobless here, Gary appears to be a helpless pawn in a game played out in corporate boardrooms, foreign capitals and Congress, where there is talk of reversing the decline through a new "industrial policy." But there is little action.

"I been up and down; up and down all my life. But this time I don't know if we're going back" to work, said Arnold J. Sparks, 56, a third-generation member of the United Mine Workers of America who has worked in the mines since he was 16. Sparks went into the mines just after his father, Charlie, was killed in a 1944 cave-in.

"The American way is gone, to me, and I am a thoroughbred American," Sparks said. "Franklin D. Roosevelt wouldn't have let something like this happen. He wouldn't have let all these big companies merge and get all this power . . . so these people in places like Pittsburgh make all these decisions and we go down the tube." Pittsburgh is U.S. Steel's world headquarters.

On Sept. 28, U.S. Steel closed six mines and a giant processing plant -- once the world's busiest -- and laid off 1,500 miners in its Gary district. Another 1,500 were laid off in 1982, and many never were called back. Five hundred company miners will be recalled on Dec. 10 in neighboring Wyoming County but many Gary miners aren't sure whether they'll be called back.

Coal-dependant West Virginia continues to have the nation's highest unemployment, at 13.1 percent. But McDowell County, where nearly 80 percent of all personal income is derived from coal, has a 22.3 percent jobless rate.

In Gary, by the estimate of city officials, the recent layoff has pushed unemployment to between 35 percent and 50 percent. A house-by-house census by the city's shrunken government showed that 28 percent of households had somebody working. About 40 percent of Gary's residents are retired.

"It's big news here if you find somebody with a job," said T.A. Anderson Sr., 62, a U.S. Steel retiree who is Gary's police chief. "We got 48 families in Filbert, my subdivision: 40 retired and eight still of age to be working, and all those eight are out of a job."

Anderson presides over a two-man department, down from eight because Gary's government lost two-thirds of its revenue in the mining layoffs. The city laid off more than half its 25 workers.

Many police calls are alcohol-related or domestic disputes that seem to flare more frequently when the mines are shut, residents said.

The UMW, once 500,000 strong under John L. Lewis, has shrunk to 160,000 members, but only 100,000 of them are working.

"That is my biggest disappointment. We haven't gotten our people back to work," said UMW President Richard L. Trumka, who said he was shaken by a recent trip to Gary " . . . It's like a cadaver, just waiting for its bones to be picked."

Coal's decline has left places like Gary literally falling apart. The city's 57-mile water system, built by U.S. Steel, is leaking so badly that only 30 to 40 percent of the water reaches the homes, according to Estep. The city can't afford the $3 million to fix it, he said.

Among those who know and love Gary there is occasional gallows humor, such as, "Last one out of town, remember to turn out the lights."

That hits close to home for Estep, because Gary already has turned out the lights. The city turned off all its street lights after the 1982 layoffs and now has relighted one-third of them.

Francis Martin, 53, the son of a miner who died of black lung, is president of a UMW Local 7905, which has 330 members -- 11 of whom are working. Last week, after 35 years as a miner, Martin found himself in a bread line for the first time in his life, collecting surplus cheese, butter, rice and powdered milk for his family from the state government.

"Makes me bitter. I never been on a food line before," said Mar- tin. "And none of this had to hap- pen . . . "

Michael Burdiss, UMW's state political director, blames much of Gary's decline on U.S. Steel's diversification into other businesses. He criticized the company for spending $6 billion to buy Marathon Oil in 1982, while failing to invest more to modernize its steel-producing capacity.

"The problem is U.S. Steel doesn't have loyalty to this country," Burdiss said, "Its loyalty is to its stockholders, and if it's more profitable and easier to play in the oil market and make a quick buck, they will do it."

"Nothing could be further from the truth," U.S. Steel spokesman Michael Koff said. Koff said the firm has spent $6.3 billion in the last 13 years modernizing steel operations and still is committed to the coal business to support steel-making.

Gary's problems stem from a chain-reaction of technological and economic changes, Koff said.

Mechanized mining drastically reduced the workforce in the 1950s and 1960s. Then new, efficient coking methods reduced the amount of coal that is needed to make steel, and demand for steel itself dropped in some industries.

"What's happening here should really be a national concern," said Estep. "We're becoming a nation of consumers and we have to be producers. . . . . Nobody is addressing this. That's what scares me."