It is not much of an exaggeration to say that the mining industry once owned Montana.

At the turn of the century, the Anaconda Copper Company employed three-quarters of the wage earners in the entire state. Known simply as "the company," Anaconda owned, in addition to its huge copper mines, millions of acres of timber land, railroads, hotels, municipal utilities, and -- as late as 1959 -- five of the state's six daily newspapers (making Montana, in historian K. Ross Toole's judgment, "the only state in the nation without an essentially free press"). In 1903, the company paralyzed the state's economy by putting nearly its entire work force on the street for a month until a compliant legislature bowed to its demand for a special session to pass favorable legislation.

The days of the copper kings are now a distant memory, but in this election season Montana's mining industry is once again flexing its political muscle, like an aging giant roused for one final battle. Now dominated by international conglomerates such as Placer Dome, Pegasus Gold and ASARCO that chase gold instead of copper, the industry is pulling out all the stops to defeat a statewide ballot initiative that would toughen protections for Montana's rivers, streams and underground waters.

If not quite like the old days, when Anaconda would throw cash, liquor and women at state legislators like so much confetti, the battle over what is known as I-122 is still a richly entertaining political spectacle. With money sloshing through the political system, accusations of false advertising, vandalism and threats of physical and economic reprisal, the fight over I-122 is easily overshadowing Montana's statewide campaigns for governor, senator and congressman-at-large.

"It's the hottest thing in Montana," said Andrea Stander, a spokeswoman for Montanans for Clean Water, the coalition of environmental and civic groups that is pushing I-122 in response to laws enacted by the 1995 state legislature that weakened Montana's water quality standards for dozens of carcinogens such as arsenic.

If I-122 is adopted, wastes discharged from new metal mining operations, and major expansions of some existing mines would at the point of discharge either have to meet state water quality standards or have 80 percent of contaminants such as carcinogens, metals and toxins removed. Under current law the discharges may be diluted in what is known as a "mixing zone" in rivers and streams -- before they have to meet state standards.

The mining industry, the main financial backer of a $2 million campaign to defeat I-122, has been warning ominously that passage of the initiative would be the death knell for an industry that employs several thousand Montanans at excellent wages and pays hundreds of millions of dollars in state taxes and royalties.

"It's an unnecessary application of an extremely radical requirement," said Jerome Anderson, a veteran Helena lobbyist who directs the industry-backed group Montanans for Common Sense Water Laws/Against Initiative 122. "Present water quality standards fully protect health and safety."

Just how safe is that water? Well, in one ad opposing I-122, a woman dips her glass into a stream and belts down water the announcer says "comes from the Beal Mountain mine." Four former state water quality officials, all of whom support I-122, quickly challenged the ad, saying that the mine's discharge does not go into the creek pictured, but into ground water.

So far, subtlety has not been a hallmark of some of the anti-I-122 effort. Gary Buchanan, an investment company vice president who co-chairs the pro-I-122 coalition, has had his house vandalized and his company has been targeted by a mining engineer who recommended to a local school board that it not be chosen as the board's bonding agent. And someone -- Anderson insists it is not his group -- has been conducting a "push poll" that purports to be a public opinion survey but in reality spreads misleading information about the initiative.

"It appears they're about as willing to violate election laws as they are water quality laws," said Buchanan of the anti-122 group, which last week was sued by the state political practices commissioner for using a name that does not accurately reflect the interests of its prime backer, the mining industry.

For its part, the industry accuses I-122 proponents of scaring voters with the specter of cancer-causing chemicals and of lying about the technical feasibility of treating water that contains minute quantities of contaminants. Proponents, said one mining industry official, are trying to "scare people into thinking that mining is going to give cancer to little babies."

If tempers are flaring in the Big Sky State over the initiative, it is because mining is such an emotional issue here, one that permeates the state's history and the continuing cultural war over what Montana is to be in the 21st century. In its campaign to defeat I-122, the mining industry is battling the ghosts of past mining practices, which have badly scarred some of Montana's glorious scenery and poisoned some of its blue-ribbon waters.

In Butte, for example, what was once known as "the richest hill on Earth" when it was producing $25 billion worth of copper, is now a monstrous festering sore on the landscape. Butte's Berkeley Pit, closed as an open pit copper mine in 1982, is now filling up with a toxic cauldron of heavy-metal-laced water -- 28 billion gallons and still rising. And the Clark Fork River is contaminated for nearly a hundred miles from Silver Bow Creek nearly to the city of Missoula, part of the largest Superfund site in the nation.

A more recent example exists in north-central Montana, where last summer the Pegasus Gold Corp. and its Zortman Mining Inc. subsidiary agreed to a nearly $37 million settlement with the state and federal government over long-standing water quality violations at its gold mine east of Havre.

Among the handful of proposed mines that would be affected by passage of I-122 is the McDonald gold mine planned near Lincoln and the headwaters of the Blackfoot River, which is celebrated in Norman Maclean's novella "A River Runs Through It." With nearly $1.4 billion in gold reserves, a potential yearly payroll of $14 million, and $60 million in royalties for the state university trust fund, the McDonald mine will be a huge plus for the state, said E. Michael Schern, project manager for the 7-Up Pete Joint Venture that is developing the mine.

Schern said the McDonald mine was designed from the start with the aim of protecting the Blackfoot, and that modern mining practices will assure no further degradation of the river. "Everything we've done from the very beginning has been with an eye to protecting the river," he said.

But if I-122 passes, he said, "It will shut everybody down."

At the Montana Mex restaurant on Lincoln's main street, co-owner Virgil Roper -- a former mine safety instructor -- portrays the battle over I-122 as a fight between the Montana of hard-working people scrambling to find increasingly scarce good jobs and the Montana of the rich and famous who flock here, drive up land prices and want to lock up the natural resources.

"It's another example of environmentalists trying to control Montana as their little playground," Roper said. "Those of us who live here and make our living here, we don't want to have the last best playground for them."

If the past is any guide, Roper's view -- and that of the mining industry -- will prevail on Nov. 5, though I-122 proponents are slightly ahead in the most recent independent poll.

As the late Montana senator Burton K. Wheeler wrote in his autobiography, in describing the power of the Amalgamated Copper Co., the holding company that included Anaconda: "No matter how clever, unscrupulous or spendthrift the opponent, you couldn't lick Amalgamated." CAPTION: At McDonald gold mine site near Lincoln, Mont., Bill Snoddy, the project's spokesman, left, and Tom Tangen, environmental engineer, stand on exposed ore.