At the foot of the windswept hill where George Washington helped lay the cornerstone for Maryland's first chartered college, Douglass Cater, author, educator and former presidential adviser, was sworn in today as the 23rd president of Washington College.

Cater, a senior adviser on educational policy in President Lyndon Johnson's White House, accepted the reins of this small 200-year-old liberal arts college on the banks of the Chester River at a time when many academicians are bemoaning the future of the small college.

The college, on a 104 acres of Maryland's Eastern Shore, is in many ways an anomaly. It is a small college determined to stay small and dedicated to the principle of broad and general education.

It seeks to attract students interested in knowledge for its own sake. But it is also a college on sound financial footing, when other small colleges are being forced to close.

In Cater's view, Washington College can become a model national institution.

Cater brings to the job a wide and varied resume, from news reporter to editor to presidential adviser, teacher and lecturer. He also has extensive contacts with some leading business figures nationwide.

Cater laid out his vision for the school in a speech entitled, "The Idea of a Small College." He said he willstress the traditional role of the small college while emphasizing the values of a liberal education.

"Free from the domineering passions of the university graduate schools, which tend to hold the undergraduate in second-class status, we can devote our intellectual energies to the wholeness of knowledge," he said.

Cater also blamed the over emphasis on specialization and technical skills, which has replaced the round table discussion and the seminar at many larger institutions, for the problems of growing illiteracy and increasing political apathy.

Despite the peril facing many small colleges like this one, Cater inherits an institution that is well off financially, having balanced all of its previous budgets.lion for its endowment through a major "Third Century" fund-raising campaign.

The college will be helped by the gift of a new campus building, which could cost up to $5 million and was donated to the school by Gaithersburg businessman Eugene Casey.

Today's ceremony was rich in history, and the list of notables attending read like a Democratic Party sample ballot for the coming Nov. 2 election. State Comptroller Louis Goldstein, a Washington College alumnus and chairman of its board of visitors and governors, presided over the ceremony. Also attending were Gov. Harry Hughes, Sen. Paul Sarbanes, and Attorney General Stephen Sachs.