This city sealed its fate more than a century ago when it decided to limit its boundaries near Ralph Clayton`s farm-only about six miles west of the Mississippi River-and secede from the county.

After all, leaders reasoned then, why should one of the nation`s three largest cities, a self-described Paris in America that in the 18th Century was the capital of the vast Louisiana Territory, spend city tax money to benefit rural residents?

Those boundaries, enclosing only 61.37 square miles, have become a noose around St. Louis, choking growth and slowly withering what a century ago was one of the great cities of the Western world.

''It was the most fateful and wrong decision,'' said George Wendel, director of the Center for Urban Programs at St. Louis University. ''To be forever frozen by the boundaries left it too small for real growth.''

A widely publicized revival in the mid 1980s-including construction of what was then the nation`s largest indoor shopping mall, resurrection of a magnificent Union Station, restoration of the moribund riverfront, and renovation of thousands of city homes-stopped a violent slide. The city had lost 44,000 manufacturing jobs from 1979 to 1983 and nearly half of its population since a 1950 peak of 850,000. Publications that had written the city`s civic obituary returned to extol its comeback.

But a string of recent unexpected events has underscored the fragility of that recovery.

The metropolitan area, after years of sustained growth that often came at the city`s expense-a competing ''downtown'' of high-rise office buildings has arisen in the last 25 years on what was Ralph Clayton`s farm when the boundary was drawn-faces uncertainty.

Unanticipated cutbacks at area auto assembly plants have been a major blow, and another may be coming in the restructuring of the American defense industry, which by itself accounted for about $7 billion in government contracts in this area in 1985.

Economists who study the metropolitan area, which has 2.4 million people, say it is not in for a deep decline, but will have almost zero growth well into the decade.

''None of this certainly could be characterized as good news, but whether it will be as bad as the early `80s is uncertain,'' said Michelle Clark, an economist with the Federal Reserve Bank of St. Louis. ''The economy is in a far better position to weather this than in the early 1980s.''

In the balance is the question of whether St. Louis will be able to call itself a ''big city'' much longer.

For the first time since 1876, when the city seceded from St. Louis County, the estimated population of St. Louis has dropped below 400,000, and the numbers are likely to continue to fall. In that time, the city`s population ranking has fallen from 3rd to 32nd; the St. Louis area is the nation`s 14th-largest metropolitan area.

City boosters counter that fewer people seem to be leaving the city than in the past 40 years.

They say that a burgeoning health and medical services industry could provide a boom. And like many cities, St. Louis is banking on its allure as a tourist attraction, anchored by the famous Gateway Arch, to generate revenue. It won`t be easy. ''St. Louis no longer has one of the attributes that make a big city, and that`s a lot of people,'' said Wendel, who has studied the area for nearly four decades.

''Psychologically that`s tough for a city,'' he said. ''The city of St. Louis has got to act like it`s still a big city when it`s not so in population.

''The question that has to be asked is whether you really have enough magnet force to pull people in,'' he said.

He and several other analysts were quick to note that some of the city`s ills-a shrunken manufacturing base, high office vacancy rate, sharp racial divisions and mediocre schools-can be seen in many other aged industrial cities. Those ills, combined with significant demographic shifts, will continue to drain a city`s resources.

''A city being smaller may not be bad,'' said Donald Phares, a vice chancellor at the University of Missouri at St. Louis. ''A city being smaller and poorer is.''

And St. Louis seems to be heading that way. ''We are getting old and poorer with a higher percentage of minorities,'' said former city budget director Steve Mullin, now director of corporate development for Laclede Gas Co.

''You end up having a lower ability to provide for a greater need for services,'' he said. ''And now you also don`t have the federal government willing to step in a make up the difference.

''Absent anything different happening, the slide will just continue until there isn`t much of a tax base left and there are widening disparities between haves and have-nots.''

The surge in downtown growth has slowed. Though a $100 million Metropolitan Square high-rise recently added luster to the city`s skyline, it also helped the office vacancy rate soar to nearly 23 percent.

Darlene Derma, an executive with Metropolitan Life, which has more than $600 million invested in the new building and other area real estate, said despite some negative news ''this is not gloom-and-doom time.'' Her company, she said, remains positive about St. Louis.

In the neighborhoods, ambitious renovation companies and entrepreneurs have been stultified by the repeal of federal tax credits that made city housing a sometimes lucrative investment. In 1982, 1,483 housing units were rehabilitated. In 1989 the number was 233.

What`s more, nearly a quarter of the city`s 197,000 housing units are classified as substandard, city housing officials say.

Higher taxes don`t seem to be the answer, as residents have recently rejected proposed increases in sales and sewer taxes. Revenues from the city`s earnings tax, however, have been on a consistent rise, reflecting rather stable downtown employment.

Economists and area business leaders have long argued that the city had to be judged in the context of the metropolitan area, which has prospered in almost direct correlation to St. Louis` inner decline.

Now that area is also facing challenges. Chrysler announced last month that it would shut a major auto plant in the suburbs, eventually laying off 4,000 workers.

Dramatic political changes in the Soviet Union and Eastern Europe do not bode well for the defense industry, an enduring foundation of the St. Louis area`s economy. The largest employer, McDonnell Douglas, which employs more than 40,000 workers, is bound to undergo some restructuring, but the local impact is not yet clear.

''We are seeing much slower growth in St. Louis County,'' said Jennifer VerLinden, an economist with DRI/McGraw Hill, an economic forecasting company. But the region is thought to have sufficient diversification to withstand a moderate downturn in defense. The area remains the corporate headquarters of Ralston Purina, Anheuser-Busch, Monsanto and General Dynamics, among others.