Buying "Baltimore" magazine, Philip Merrill admits, is a gamble. "But I think it's a safe gamble, if I didn't, I wouldn't have bought it."

"I think Baltimore is an undervalued city. It's a sizeable market, a stable city on the way up. Most people don't realize that."

Merrill, publisher of the Annapolis Evening Capital and four weekly newspapers, took over the magazine this week from the Chamber of Commerce of Greater Baltimore.

"I intend to run it, though not forever," he said in an interview. "After a year or two it ought to stand on its own feet."

The purchase price of the monthly was not disclosed.

Merrill said suggestions that he paid as little as $5,000 for the publication are too low and predictions he'll have to pour a million into it are too high.

"It's going to require a substantial investment," said Merrill, who acquired the Annapolis daily and four weeklies in 1958. He and four partners made a $715,000 down payment on the $2.5 million purchase price of the papers.

A Baltimore native who has worked as a newspaper reporter and for an advertising agency, Merrill was in the State Department before taking over the Annapolis papers.

Despite ownership by the Chamber of Commerce, "Baltimore" magazine has never been run as a profit-making business, Merrill said.

The chamber said the magazine was in the black when it was sold, but that depends on how you figure it, Merrill said. The magazine was not charged for office rent, telephones or other services. It was not separately incorporated, so it has no earnings history, nor any losses that the new publisher could use to offset future earnings.

But a two-year effort to shape up the publication by the Chamber of Commerce means "It's now capable of making a run for permanance as a city magazine," he said.

He said Chamber of Commerce efforts to improve the magazine's editorial pages "made it into a real city magazine, even though it was inhibited by the chamber."

But he said the magazine's editor cwould stay on. Like most other city magazines, it will depend on free lance writers for most of its major articles.

Merrill said he has two aims for the magazine: creating "a consumer magazine telling people how to maximize their life style" and taking "a reasonably aggressive, analytical magazine approach to matters that affect their lives."

Merrill called Baltimore, "a much sounder, more upbeat community than most people realize." He said his magazine - like similar publications in the other cities would be aimed "at an upscale audience."

Whether there are enough Baltimore residents interested such a magazine to boost its 16,000 circulation remains to be seen, he acknowledged. "It's an unproven assumption that Baltimore can support a successful city magazine," he said.