While Navy investigators looked on, a 37-year-old mother of five died last Wednesday evening in an Oakland, Calif., Navy hospital where three other people have died under unusual circumstances in the past two months, according to Rep. Thomas J. Downey (D-N.Y.).

Jane C. Terry of Pittsburg, Calif., had entered teh Naval Regional Medical Center for pelvic surgery on Aug. 3, four days before the Navy's inspector general and a team of doctors arrived to investigate the other three deaths, which evoked charges of understanding and faulty equipment in the hospital's anesthesiology department.

Terry underwent a hysterectomy and appendectomy with no problems, sources said, but developed complications when doctors removed her stitches.

A spokesman for Downey charged that the effort to save her life was hindered by the lack of a respirator whose absence reportedly figured in one of the earlier deaths.

A hospital spokesman called Downey's charge false. Other sources said the hospital did not have the particular brand of respirator that one doctor wanted, but did have the needed equipment.

The anesthesiologist on emergency call that evening was Dr. David Crane, the resident who brought the first three deaths to light. Sources said Crane ran upstairs to the room where the inspector general's team is headquartered, shouting, "If you want to see people dying needlessly in here, come see!"

Downey's office said Crane and other doctors tried to save the patient's life, but she died in the operating room.

A hospital spokesman said the case has been turned over to the inspector general's team for investigation.

The death brings to six the number under investigtion at the hospital. Four have occurred since June 24 this year, one last year, and one in 1974.

Crane and others have charged that all the deaths are tied to the critical shortage of doctors and equipment. The Defense Department has acknowledged shortages in staffing and equipment throughout the services, but a spokesman for the Oakland facility insisted the situation there is no worse than at other installations.

On July 20, Crane formally charged the Navy surgeon general and the top three officers at the Oakland hospital with "negligent dereliction of duty" for not rectifying "a severe shortage of equipment and a severe shortage of faculty anesthesiologists."

Crane charged they had been "repeatedly notified" of the conditions, both personally and in writing, but "knowingly allowed these conditions to exist for a period of at least nine months without remedy."

The current investigation is an outgrowth of Crane's charges. "I am here . . . based on the charges filed by Dr. Crane," said the Navy inspector general, Rear Adm. Stanley Anderson.

Anderson would not comment on the report that he or members of his team witnessed the Terry death. He has steadfastly refused comment on any aspect of his investigation.

The Oakland medical center is one of relatively few teaching hospitals in the military services. A generally highly regarded facility, it has 413 beds, 103 staff and faculty members, and 40 interns, said a spokesman.

Last year, it treated 14,175 in-patients, and 351,800 outpatients. Like most military hospitals, it provides free care for active and retired service personnel and their dependents.

The deaths last year and in 1974 have been previously unreported.

In May, 1974, Sherisse LeAnn Bennett, 9, died seven days after an anesthesia machine apparently malfunctioned during an appendectomy, Downey's office said.

The attending physician attributed her death to natural causes, but another doctor on the scene contacted the Alameda County coroner's office to report "extenuating circumstances," said deputy coroner Ray Young.

Young said a coroner's inquiry revealed that the death was not natural but accidental, "something that was caused apparently during the surgery."

The 1976 case involved a terminally, ill woman. 48-year-old Hattie May Roberts, who died when an artery in her throat was severed during a tracheotomy.

At least one other woman has suffered permanent but non-fatal injury as the result of apparent problems with anesthesiology at Oakland. Cybthia Krohm, 28, has lost over 90 per cent of her hearing "due to an error," said a spokesman for Rep. Fortney Stark (D-Calif.).

Downey, calling it "a growing horror story," has demanded copies of all the hospital's death certificates for the last five years to determine if any other deaths have occurred under unusual circumstances.

Meanwhile, Downey has expressed concern that the investigation is turning into an attack on Crane. The young doctor has been informed that he is under suspicion of dispensing information to aid a claimant against the government, and has twice been questioned by the investigators behind closed doors, according to his attorney, Michael Rose.

A spokesman for Anderson said, no charges against Crane are presently contemplated, and said the warning that he is under suspicion is routine.