It wasn't that any of the people who help run Columbia's affairs ever believed that this highly admired new town could be immune from a crime like embezzlement. It would have been naive - silly - to think that, several of them reflected yesterday.

But when one of their own - a bright young man who had been active in the community for seven years - was indicted Monday on charges of embezzling a total of $195,416 from the new town's association funds, community leaders were left stunned and somewhat hurt nonetheless.

"These things can happen anywhere," said Columbia Association director Mike Rock. "It's too early really for people to back off and do an assessmenmt of what they really feel like . . . All I can say is that the psychological effect is not very positive."

Located in the heart of a state troubled by charges of corruption among some of its highest officials, Columbia - with its carefully planned subdivisions and parks and its emphasis on citizen participation and community activities - had seemed to some an oasis, a hint of what people with good intentions could accomplish.

It is an image that may be slightly tarnished. But community leaders insist that the essential character of Columbia has not been harmed.

"Someone would be immature to react that this place, Columbia, is just as bad as any other place, as if it had been better," rock said. "As far as an embezzler is concerned, a corporation like this is just another corporation to embezzle."

On Monday, five days after he was fired as a treasurer of the Columbia Association, Walter James Davis, 30, was indicted by a Howard County grand jury on larceny and embezzlement charges.

The association built the pools, parks, and community centers that were designed to make Columbia more of a community than all the cities and suburbs that came before it.

Davis has told association officials in a letter that he took association funds and diverted them to his own use systematically over a 3 1/2 year period.

"I want you to know that I am tryly sorry for not only the fact of the embezzlement but also for the breach of confidence that you and other members of your staff have placed in me over the years," Davis wrote in the letter to association president Tadraic Kennedy.

"While I may never be able to restore that faith," Davis worte, "I do want to make full restitution to the Columbia Park and Recreation Association . . ." Davis estimated in the letter that it would take him 15 years to do so.

Association officials and the Howard County state's attorneys who are investigating the case have been left puzzled as to what Davis - who maintains he acted alone - actually did with all the money.

In his May 23 letter of resignation and confession to the association, Davis lists his net worth as $48,000, including equity in his Mercedes sports car and a $112,000-house that he and his wife own in the High Tor section of Columbia. He has promised the association that as soon as he is able to find work he will pay it back all that he earns after taxes, until he has paid back what he says he took.

The day after Ray Meals, an association official who had hired Davis for the job, confronted him with evidence of his crime, Davis considered leaving town, Meals said.

Davis' attorney, Timothy Welsh, said yesterday that Davis has agreed to plead guilty, probably next week, to a charge of larceny after trust, following plea bargaining with the Howard County state's attorney. He faces a maximum penalty of five years and a $1,000 fine.

According to Welsh, the whole thing started when Davis got used to living beyond his means. The first phony check was drawn in November, 1973, "under the extreme pressure of a financial nightmare . . . just a whole lot of bills," Welsh said.

After that, Davis "was caught up in a situation and it just snowballed," Welsh added.

But that explanation doesn't answer all the questions of investigators. What did all that money - which broke down to more than $1,000 a week - buy? Nothing in the present holdings of Davis and his wife, or the records of their vacations, indicates more spending than a young childless couple whose salaries total more than $45,000 could manage, according to investigators.

"It could be in a Swiss bank account, we just don't know," one investigator said yesterday.

The uncertainity generated by these questions, and by the worries that the Columbia Association may have trouble selling bonds because of the embezzlement, have left association directors ill at ease. But, according to one, the incident also has united them.

"This board is more steeled to resolving the problems that have arisen out of this thing than any that have come before," said director Rock. "The board members are really highly motivated to solve all this."

Other association officials are taking some comfort in the fact that, while their accounting system did not prevent the embezzlement, it forced the embezzler to leave clear tracks that the auditors could pick up.

Now, according to association president Kennedy, the most important priority of the association is "making sure this matter is totally investigated, in a totally open and public way. . . . (I want) to make sure it's all known."