A new exhibit, "Two Centuries of Change: The Idea of a Downtown in Washington, D.C.," is scheduled to open at the Pension Building July 25. A photograhic essay on the history, function and potential of downtown Washington, it may also be a glimpse at a museum in the making.

The designers of the exhibit, a small volunteer group called City Museum Project, hope the exhibit will excite interest in their proposal to create a museum whose primary focus would be the social and economic development of Washington.

"Almost every national capital and almost every large city has some sort of institution devoted to museum activities with local emphasis," said Earl James, administrator of Washington properties for the National Trust for Historic Preservation and Chairman of the City Museum Project. "With all our existing museums, though, Washington has none which focuses on the city as a place where people live out their lives."

The city exhibit, organized with a $50,000 grant from the National Endowment for the Humanities, depicts the history of the city's development and the functions of the downtown area over 200 years. It reflects the overall approach and philosophy the proposed museum would have.

James noted that 200 years ago the city of Washington was really a small town between the Capital and the White House. It was a neighborhood of stores and houses.

"There wasn't much physical growth until the Civil War period, when there was an influx of soldiers, a growth of government support for the war effort and an increased influx of blacks from the South who saw Washington as the place that gave them their political freedom," James said. "Most other major growth periods have come with other wars."

The exhibit, using photographs, maps and charts, takes note of the impact of federal government on the growth of the city, the role of the old Center Market as a cornerstone in the shopping center of downtown, and the growth and cultural relationship of church and religious buildings.

Mawson noted that other groups have failed in their attempts to start a city museum, and this spring, his organization began to campaign actively to convince the City Council that a city museum was a necessity.

"We have gone to the city government with a bill for approval of a concept," he said. "We're not asking for money right now. A privately operated museum with city funding, though is our idea."

The bill, already introduced by Council Chairman Arrington Dixon, calls for establishing the museum either as an individual agency or part of an agency. CAPTION: Picture 1, Turn-of-the-century 13th and G streets NW.; Picture 2, FALLEN DRAGON - Katharine Greider and Justine Kalas admire the front-yard creature artist Glen Martin created for a family in the 5800 block of 38th Street several years ago. The tree fell during a 1976 storm. By Douglas Chevalier - The Washington Post