DUBUQUE, IOWA -- James Sutton was working on railroad maintenance gangs out of Chicago when he first saw how blacks were welcomed to this Mississippi River town. As trains arrived, he recalled, police officers would greet disembarking black passengers and "tell them to get back on the train."

It was the 1950s, and the technique worked, giving the city that made John Deere tractors and Dubuque hams an ugly reputation among blacks. In the words of the Des Moines Register, Iowa's largest newspaper, Dubuque had become "the Selma of the North."

Dubuque had so few minority residents that, as Mayor James E. Brady, 49, said last week, "You could go for a year or more without seeing a black." The Dubuque of Brady's childhood had at most four or five black families, and all "put their heads down when they were stared at," he said.

Claudette Carter-Thomas, a black from Freeport, Ill., said she stayed here after finishing college in 1978 despite a warning then that was simple and direct. "The message was, 'Don't go to Dubuque,' " she said.

Few people, least of all city officials, apparently were troubled by the scarcity of blacks or the way they are treated in this heavily unionized, blue-collar community cut by Irish Catholic and German Protestant immigrants in the 1830s into a beige limestone bluff along a gentle bend in the river.

Then, on the morning of Oct. 23, 1989, police discovered the charred remains of a small wooden cross bearing the words "Nigger" and "KKK Lives" in the burned-out ruins of a garage owned by a black official of the local chapter of the NAACP.

To Brady and other city officials, it was stunning evidence that deep undercurrents of racism existed even though Dubuque had a tiny minority population. Of 57,546 residents, 331 are black, the smallest percentage of any major Iowa city.

The city government established a "Constructive Integration Task Force" that drafted an ambitious nine-page plan titled "We Want to Change." It pledged to bring 100 minority families here by 1995 and said public funds should be used to help private companies recruit minority workers. City leaders called the plan unprecedented and expressed hope that Dubuque would be ready, in the plan's words, to shed its image as "a closed, intolerant and even racist community."

Far from producing racial harmony, the plan sparked confrontation that has spilled into the night, with 10 cross-burnings and a racial fight in the city high school that resulted in four arrests and police patrols in corridors. Moreover, it has spurred whites to talk about what, if anything, the city should do to bring more blacks here.

"They come in fast enough now," said Vincent Neyem, 80, nursing a beer in Noonan's Bar in the working-class north end. "Why bring in more trouble? We've got enough trouble."

"Why do you have to have a plan like that?" asked Connie Booth, a city worker having coffee at J&R Bakery near the site of a recent cross-burning. "If they want to come, let them pay their own way."

In recent days, similar sentiment has gained national attention, fed in part by angry statements of what authorities say are about 10 to 20 young men, professed supporters here of Louisiana gubernatorial candidate David Duke. Some have been implicated in the first wave of cross-burnings and other crimes.

Friday night, police announced the arrest of David Israel Simpson, 19, and said they were seeking another adult and a juvenile in connection with two cross-burnings.

A few hours after Simpson's arrest, police found a burning cross on an elementary school playground and reported finding "KKK" written on a woman's garage.

Police chief John Mauss quoted Simpson as saying he was protesting the integration plan, but Mauss said police have no evidence linking Simpson to people accused in previous cross-burnings. However, shortly before his arrest, Simpson told local reporters he had erected hand-painted signs around town that supported some of the local men who were trying to form a chapter of the National Association for the Advancement of White People (NAAWP).

One of those is Mike Lightfoot Jr., 19, serving a jail sentence on charges related to previous cross-burnings. In a recent letter published in the Dubuque Telegraph-Herald, he wrote from jail, "I don't think it's fair to take the few jobs that we have and give them to minorities."

Lightfoot and his companions have said they lighted the first crosses to alarm people about "the plan."

"I don't think there is anything wrong with being a predominantly white town," said Bill McDermott, 21, a laid-off construction worker convicted in an assault case unrelated to the discord. "There are a lot of predominantly black towns in America."

The young men, who said they hoped to organize an NAAWP chapter here, have been branded as racist toughs by Brady and city officials. Duke, who founded the NAAWP, has publicly disavowed a connection to the group here. Lightfoot said plans for a chapter here were abandoned because some prospective members are on probation and prohibited from associating with each other.

Brady conceded in an interview that the group's opinions have found wide resonance here. He also wondered aloud whether the integration plan was "too bold."

All major employers have endorsed the plan, and many merchants are distributing black-and-white ribbons for townsfolk to wear as a plea for racial harmony. But neither labor unions nor Roman Catholic Church leaders, primary forces in local politics, had a major role in shaping the plan.

Many residents interviewed this week said a little-noticed suggestion in the plan that workers' seniority might be waived to accommodate newly hired minority workers is a red flag to many unionized workers.

Blacks and their supporters said the city must do something now. "This is a terrible place, and it didn't just get that way," said Hazel O'Neal, who arrived in 1985 when her husband was transferred by a meat-processing company. White children run at the sight of a black person, blacks must produce multiple identification to cash checks and they endure stares wherever they go, she said.

Other blacks echo her story. Carter-Thomas, a state probation officer supervising some of the young men charged in the cross-burnings, said she must drive 70 miles to her hometown of Freeport, which has a larger black population, to have her hair done or buy beauty products and stockings that suit her coloring.

In the supermarket, she said, whites have eyed her purchases and said, "Oh, my, what are you buying?" as if her eating habits are different. "The subtle racism here is harder to handle than the outright things," she said. "You know how to deal with cross-burnings."

Sutton's wife, Ruby, who arrived 29 years ago when the railroad transferred him here, said her family has endured constant taunts. "I used to say we packed every night" to leave, "{and} now we pack once a month," she said, only half in jest.

Newer residents are more militant about demanding their rights, said Ruby Sutton, who founded the NAACP chapter and works in an antipoverty agency. "My kids say to me, 'You've been here for 29 years, and your way hasn't worked,' " she said.

Jerome Greer, a St. Louis educator recruited as the first black in the 1,200-employee community school system this fall, blamed Dubuque's isolation -- 70 miles from the nearest interstate highway -- for much of the problem. "No one comes through Dubuque," he said.

The city is attempting to end such isolation, most recently building a greyhound dog-racing park and adding riverboat gambling on the Mississippi, efforts that draw an estimated 2 million visitors a year.

Images of blacks as poor, on welfare, involved in crime and inferior to whites abound in discussions in bars lining Central Avenue in working-class neighborhoods.

"What's so wrong with our own culture, the white people?" McDermott asked, echoing Duke's rhetoric in Louisiana. "Not a lot of white people sit around and play basketball all day. We have different cultures.

"A lot of blacks are crying like they want more. They weren't treated fair when they arrived in America, but that wasn't me. I think we've done enough for them from the 1960s to the 1990s."

Brady and Charles I. Azebeokhai, a native of Nigeria and the city's human rights director, acknowledged that many residents are insensitive to blacks. "People think you are inferior, subhuman," Azebeokhai said. "It's not Dubuque. It's a mirror on what's happening in all America."

But they said the actions of many residents are products of a lack of familiarity with blacks, which they said makes implementing the integration plan all the more urgent.

Brady said he is concerned that the city's racial problems will cut demand for its products and hurt the job market. "There is no place in this United States for any city that wants to close itself off," he said.

City Council member Michael Pratt, who contends that his support of the plan cost him a reelection bid this month, said he wondered whether integration can succeed.

"I'm not so sure we can find 100 families willing to teach this community that diversity is good," he said.