TOWSON, MD., JUNE 2 -- If modesty is a virtue, the Maryland Republican Party may be almost ready for sainthood.

Despite brave talk during a spring state convention here, the minority party has a decidedly modest aspiration in this election year: to begin the steep climb toward parity with the state's dominant Democrats.

Republicans across the state are slowly increasing their numbers, and even Democrats concede those gains could help, especially in fast-growing suburban counties, to elect a few county council members and some legislators.

Grander goals may take some time. The most common adjective used to describe the party's ostensible top-of-the-ticket, gubernatorial candidate, William S. Shepard, of Potomac, is "credible." Most Republicans express confidence only that Shepard, in his long-shot campaign against Democratic Gov. William Donald Schaefer, will not be a drag on local races.

One Republican officeholder said of Shepard, "It's like the Hippocratic oath: 'First, do no harm.' "

A key for the party, which holds a registration majority in only three of the state's 23 counties, is whether Shepard can begin to win back some of the corporate allegiance lost to Democrats over the years. "The real question is whether the business community gets specifically behind Shepard," said Richard Bennett, Baltimore County GOP chairman.

In a keynote address today, Shepard, a former career U.S. Foreign Service officer who ran unsuccessfully for Congress in 1986, reiterated his assertion that discontent with Schaefer's spending policies will help Republicans in the fall despite the Democrats' more than 2-to-1 edge in Maryland voter registration.

"This race is no longer Schaefer's to lose," Shepard said. "This race is ours to win."

Shepard disappointed some of the 116 convention delegates today by failing to announce a lieutenant governor running mate. Shepard said Friday night that he is continuing to interview prospective candidates, and an aide denied persistent rumors that Shepard had been turned down by some potential candidates.

Nevertheless, a party that has had little to cheer about in elections for state offices had good news to celebrate this weekend. Chairman Joyce L. Terhes, who took over amidst the rubble of intraparty splits late last year, could report that Republicans in Maryland are out of debt for the first time since 1986. Since January, she said, nearly $145,000 has been raised, and the state office now has a fax machine. Still, the pennypinching must go on. Terhes couldn't show the convention a videotape of a party promotional commercial because the cost of renting a VCR was $66.

Recruitment of candidates for local and legislative races is progressing well, she said.

"I'd like to win a minimum of one county executive race," Terhes said, "and pick up three to five House of Delegates seats and two in the Senate."

Winning at least one county executive seat -- all are now held by Democrats -- and some legislative races would mean "we'd have candidates groomed and poised for 1994," she said.

Terhes said that in addition to the reelection of two Republicans in the U.S. House, Reps. Constance A. Morella and Helen Delich Bentley, she hopes one of the eight Republican candidates in the 1st District race will defeat Democratic Rep. Roy Dyson. The sprawling district covers the Eastern Shore and Southern Maryland.

"I'd love the governor's office, but that's a heck of a long shot," she said in an interview.

Mark Frazer, a candidate for Congress in the 1st District, added, "The courthouse, that's where we need to focus."

Terhes, a Calvert County commissioner, tantalized many of the Republicans at the convention with predictions that a "major" figure was planning to switch registration from Democrat to Republican to run for office this year.

She declined to identify the candidate, saying that the Republican National Committee will get involved in an announcement sometime before the June 18 deadline for changing parties in this year's elections.

Mostly, 1990 looks to Maryland Republicans like a building year.

Said Terhes, "When you're the number two party and in the shape we've been in, you can't expect to come back and have miracles overnight."