SILVERTON, Ore. - Terry Caster says his town is "a Norman Rockwell kind of place."

He's talking about Silverton, a contented community of 6,800 souls in Oregon's Willamette Valley.

Just east of Salem, between Interstate 5 and the foothills of the Cascades. Portal to Silver Falls State Park, Oregon's largest. Circled by farms growing everything from cauliflower to Christmas trees.

The pioneer town has been around since 1855, when the main industry was a flour mill powered by the swift-running waters of Silver Creek.

Not much has changed here over the years, except maybe the recently expanded hospital, the new library wing and some of the store names.

The grist mill is gone. So are the days, not that long ago, when Silverton was a thriving timber town.

Logging restrictions rocked the timber industry in the 1980s. Silverton's economy nose-dived, leaving several empty business buildings in the downtown core.

"Fortunately, property owners couldn't afford to tear down the old buildings," says Mark Bauer, executive director of the Silverton Area Chamber of Commerce.

Now Silverton's 10-blocks-square downtown is listed as a national historic district with buildings dating from 1885 to 1935. Downtown looks almost as it does in the antique photographs that decorate the annual Silverton Community Calendar.

Neighborhoods are sprinkled with charming Victorian houses and the modest but sturdy homes of long-ago mill workers with open porches to catch summer's cooling breezes from the Cascades.

"You don't feel like you are driving into a tourist place - and that's the way we like it," says Terry Caster, president of the Chamber of Commerce.

Travelers discover some of Silverton's history in a series of outdoor murals painted by local artists.

The Silverton Mural Society is the force behind the murals project. Chemainus, B.C., a mill town that turned itself into a major visitor destination with a collection of acclaimed murals, was the inspiration.

One mural - titled "Silverton's Old Oak" - illustrates the story of an ancient oak tree, a gathering place, that used to stand in the middle of Main Street. One day, when most of the pioneer settlers were away, newcomers decided to chop it down in the name of progress.

The mural is on a wall of the Silverton Art & Frame store, near First Avenue and Main Street.

Another - "Silverton, City of the Falls" - represents 117-foot-high South Falls, highest of the 10 waterfalls that decorate nearby Silver Falls State Park. It is on a side of the Silver Falls Realty building at Main and Water streets.

Silverton honors America - and Norman Rockwell - with copies of the famed artist's World War II "Four Freedoms" paintings. The murals parade across a wall of the Masonic Building at Second Avenue and Main Street.

"This is a town that embraces its past, but now we're getting ready for the next century," says Terry Caster.

For sure, change is on the way for old Silverton.

The Oregon Garden - a world-class botanical garden that eventually will spread over 240 acres - is under construction only a mile or so south of town. Before long, if projections are accurate, 200,000 or more visitors a year will be driving through Silverton to tour the garden.

Grand opening of The Oregon Garden's first phase is scheduled for June of next year.

"There is some concern about the impact the garden will have on Silverton, but I believe we will be OK," says Greg Smith, executive director of Historic Silverton Inc.

Historic Silverton is a nonprofit corporation formed to protect what Smith calls "Silverton's historic sense of place."

"We are trying to solve problems before they become problems," Smith says.

Examples: To ease traffic congestion, visitors will be offered shuttle transportation between Silverton and The Oregon Garden. And new downtown public-parking lots soon will be available. ------------------------------- Stanton H. Patty, a Vancouver, Wash., writer, retired as assistant travel editor of The Seattle Times.