David Gray has spent nearly all his life in this sooty waterfront community in the most heavily industralized quarter of Maryland, enduring the smelly fish kills, filth and ear-splitting noise caused by surrounding plants.

But the huge industries that have soured his life near the southeastern corner of Baltimore City have no work for Gray. Like many of his fellow residents, he has moved from factory to factory in recent months looking for a job without success.

Z "With all these industries, you'd think I could put some money in my pocket (get a job)," the young man said, pointing to the chemical plants, oil refineries and giant Dundalk Marine Terminal that form a horseshoe around his home alongside the Patapsco River.

In earlier gubernatorial elections, Maryland politicians generally treated unemployment as an issue separate from taxes, education, honest government and the vitality of cultural life in the state.

But in programs released yesterday, both Republican gubernatorial candidate J. Glenn Beall Jr. and his opponent, Democrat Harry R. Hughes said the economy will not be revived and new jobs found until tourism is boosted, the bureaucracy reorganized, a freeway constructed, the port of Baltimore dredged and public education improved. The solution to many of the state's woes, they said, is to encourage "economic development."

"In short," said Hughes "business and industry need a total envioronment that encourages productivity, encourages a quality of life necessary for corporate and family growth, a political climate clean - and preceived to be clean - and responsible state and local governments."

Last year two reports on the state's economic development were released and both were gloomy. Since 1970, Maryland lost 41,200 manufacturing jobs and the state's per capita income dropped from the 18th to the 32nd among the 50 states. At the same time, the state bureaucracy doubled, the state budget quadrupled and the individual tax burden of Marylanders rose to the fifth highest in the country.

The loss of private industry and jos became linked to the growth of state government and "economic development" was named the state's premier problem.

In their search for a solution and for new industry, Hughes and Beall have left no issue untouched, using the phrase "economic development" to cover a broad range of issues.

Hughes' program was the more all-encompassing of the two. Beall stuck to a dozen recommendations generally aime at ruducing the amount of government red-tape that faces new business and promoting Maryland to industries elsewhere.

The Republican promised to appoint a full-time staff member to entice new industry, to eliminate "redundant" requirements for industries moving to the state, to increase the amount of money in a state program that insures industrial mortgages and to eliminate taxes he considers "disincentives to growth."

"By paying state taxes on farm equipment, manufacturing machinery and pollution control devices we make people pa before they produce anything," he said. "If we want to be fair, we should put taxes at the other end, on their profits."

Hughes, on the other hand, said 17 changes have to be made if the economic trends were to be reversed. Like Beall, he said he would be the state's best promoter for new industry, "Maryland's top salesman."

He also promised to coordinate promoting the state's education, health, recreational and cultural assets, both in the United States and abroad.

In addition, he said he would bring in more federal jobs, a task he said would be easier for a Democratic president and Congress. He also promised new energy programs to develop coal in western Mayland and oil and natural gas off the Atlantic Coast in the Baltimore Canyon.

Adding a new state department of commerce to his cabinet was one of Hughes' main points - a promise made during the Democratic primary and one criticized since then by Beall.

"We don't need a department of commerce," Beall said. "That's just another layer of bureaucracy. The present department of economic development is enough."