Montgomery County Executive Charles W. Gilchrist, reelected in November, observed at his inauguration Monday that the people and institutions of the county "combine two qualities that often are in conflict: vitality with maturity." Elected officials, he said, must encourage and lead those forces at a time when revenues are leveling off and "the process of adjustment has begun." Here are excerpts of the speech he gave at Richard Montgomery High School in Rockville in which he described that adjustment:

We have reduced the size of the county government, set priorities, increased non-tax sources of revenues, set in motion a process of evaluation and accountability. Equally important, we are using more effectively the enormous resources of the private sector in our county.

There are countless examples: the private sector help for our working poor; the Bar Association Legal Services to poor, religious and labor groups working for the success of an anti-hate rally; the business community fight against drunk driving; business advisors to county departments on county issues.

More, much more, restraint and cooperation will be required, in and out of government. We need to make painful choices among services, and yet maintain the excellence that our citizens have a right to expect. As we make these hard choices and call upon the private resources of our community, however, it is vitally important to consult and depend on affected civil employes.

They possess the very combination of maturity and vitality that is needed to accommodate moderating growth. We enjoy an experienced and imaginative civil service: Ride-On drivers, architects, social workers, auditors, police, thousands of others . . . .

Second, consider our economic health. Our economy is buoyed by the growth and strength of a vigorous private sector.

Years ago, our predecessors in government called for "smokeless industry." Today, that is a reality. We are in the forefront of the information revolution and medical and scientific research. Our small business, development, and farm communities are superb.

The vitality of our private sector is the more welcome and the more urgent because we must adjust to a leveling-off of federal employment . . . .

Lets talk briefly about some areas of tension that could either polarize us or strengthen us in diversity.

We have, as our planning commission has emphasized, pronounced differences between the up-county population -- in need of new schools, roads and libraries--and the down-county, where we are working to revitalize and enhance established urban areas.

The percentage of Montgomery Countians who are aging is increasing. We have done much to meet the needs of our older citizens for housing, transportation, recreation and health services. Also, we have unbounded gratitude for the volunteered talents of our older citizens, to teach our young, to advise us, and to contribute in every way to public programs.

Ethnic, racial and religious minorities are increasing, and are making an increasingly positive contribution to all that we do. But the number of reported acts of destruction and violence arising from racial and religious intolerance also has increased.

Again, however, the positive forces in our community are prevailing. Citizens have come together in a network of neighbors to help prevent these acts and support the victims; the recent legislation proposed and adopted by the council to provide civil penalities and rewards will help. The outpouring of citizens to clean a desecrated synagogue, and to rally peacefully in Silver Spring against the vicious forces of hatred, show a steady and lasting commitment to reject and to punish this venomous influence of a few . . . .

Our people and our community are coming of age, but with the vigor of youth. They recognize that what was once taken for granted now can be achieved, but only by selection and by combined public and private initiative. They have produced an economy that will thrive, primarily through education and training.

They hold steady and traditional values that arise from increasingly diverse backgrounds. They not only tolerate but celebrate this diversity based on principle and enlightened self-interest. They are aware that we must deal with the diseases that undermine our whole society: the slaughter from drunk driving and drug abuse, the waste of scarce energy, the potential decay of urban areas.

They think more about the human condition--the loneliness that can come from age, or handicap, or from being different, the importance of moral and religious issues and values, and, yes, about the future of our community in a dangerous nuclear age. They reflect a healthy impatience, a belief that people should pull their oar, and that those who violate the law should be punished.

The single lesson of these strengths that I emphasize today is that there is no asset more valuable than our people's wisdom and capacity. The prize of effective communication between government and its citizens is more precious and more attainable than ever. More than ever we must listen, and reach out to those who have not been heard.

We must always be prepared to negotiate with those who have special problems, and allocate burdens fairly.