Maryland Attorney General Stephen H. Sachs, who is seeking the Democratic gubernatorial nomination, called yesterday for tougher prosecutorial laws and restitution to victims of crime while stressing the importance of rehabilitating imprisoned criminals.

He gave what he described as a preview of his campaign platform on criminal justice before a conference of 150 jail officials at the University of Maryland. "Those of us who put people in prison for a living have a special obligation to talk about our obligation to them and society once we put them inside," he said.

While touching on proposals popular with prosecutors and victims' groups, Sachs delivered his most emotional appeal for the rehabilitation of criminals, stressing education in prison as "an investment that will protect all of us."

Sachs said he would make literacy "mandatory or near mandatory" as a condition of release. "Cost analysis is not the only way to measure the saving to life and property by reaching and making a productive citizen of someone in our custody for six or seven years . . . .

"The public doesn't applaud those who speak for inmates, even though they are speaking for society," said Sachs, saying this was "a role I've tried to play and will continue to play in my political and professional life."

Sachs, a former U.S. attorney in Baltimore, also took the part of prosecutors in arguing that the state needs a stronger law, similar to the federal statute, to compel witnesses to testify if they are granted immunity from prosecution. In the state's savings and loan scandal, Sachs said, "we had to go to the General Assembly to beg for the special limited legislation to compel testimony to put together some of these very important cases."

Sachs also said the statute of limitations on conspiracy cases, now one year, should be extended because conspiracy is the only crime statute "frequently available to prosecutors" seeking to try white-collar criminals.

Sachs also proposed restitution for victims of property crimes. He said nonviolent criminals should be put to work rather than imprisoned to make money to pay restitution.

Sachs said his two decades of dealing with criminals has brought him to some gloomy conclusions about the state's system of justice. He called prisons "crime factories" that "generate criminals" and noted that of 13,000 persons incarcerated in Maryland, as many as 70 percent would commit crimes after their release and return to prison.

"We have not produced correctional institutions that truly correct or reformatories that truly reform," he said. "Despite all your efforts, we have not really begun to turn the corner."

He blamed past "maladministration" for the failure of progressive prison programs in the state, but he insisted, "This doesn't mean the ideas are flawed . . . . We can and need to do better . . . . "

Sachs was the luncheon speaker at a conference sponsored by the Maryland Correctional Administrators Association and the Institute of Criminal Justice and Criminology of the University of Maryland. His Democratic rival, Baltimore Mayor William Donald Schaefer, had been invited to deliver the keynote address but was busy yesterday touring a North Carolina research park.