In May, 1973, a young man from a fledgling neighborhood federation called SECO knocked at Elaine Smith's well-kept brick row-house here and asked about her neighborhood's problems.

"Look at those boarded-up houses," she told him. "Look at this street. You have to wear a hardhat to walk down it because people send their garbage out airmail. Look at that alley across the street. There are rats. There's trash - a stove, mattresses, a couch. You could furnish your house if you weren't particular."

"What can we do about it?" asked the young man, who introduced himself as Sam Prentice from SECO, the South East X.Community Organization. "Well, you could get me a tree." she replied, and when he looked puzzled, she added, "It'll hide my view of the garbage in the alley."

Prentice told her that solving problems, not hiding them, was view SECO is all about.

In the seven years that it has been operating, SECO has become a national symbol of how to save a neighborhood. Civic and business leaders, housing experts and community organizers from around the country periodically come to Baltimore to see how it works.

Tomorrow another group is coming - the National Commission on Neighborhoods, which was created by a 1976 act of Congress to study whether governmental policies ought to be changed to help neighborhoods help themselves.

Among those welcoming the 20-member commission at a banquet here tonight will be a person who almost gave up on the neighborhood but then became a militant organizer and is now president of SECO: Elaine Smith. From her and other southeast residents, the commission will hear how SECO, an amalgam of 70 groups, stopped the city from running an eight-lane expressway through their back yards, prevented the state from plunking a prison in their midst and halted the closure of a hospital wing for the elderly.

Commission members will hear about SECO's health center, land bank, and projects to revive business areas. They will hear about the Neighborhood Housing Services office, with SECO and savings and loan officials set up, and how it has secured loans totaling $4 million for hundreds of people to buy and renovate houses in the area, which lenders once avoided. They will also see how SECO has urged, cajoled and, with the city's help, finally forced thousands of residents to spruce up their homes, streets, alleys and yards.

Before it leaves to tour other parts of Baltimore tomorrow and Sunday, the commission will get a briefing from SECO on why it works.

A large reason, SECO leaders say, is that it has relied on its greatest resource, the people of the southeast. Mostly they are hard-working, Catholic, blue-collar people whose $9,800 median annual income is well below the city's median of $13,000 or the metropolitan area's $15,700.

In SECO's eight-square-mile area the 94,000 residents are 11 percent black, 7 percent oriental, Hispanic and Lumbee Indian, and 82 percent white - Polish, Ukrainian, Greek, Italian, German, and some Irish. Here, a mixed marriage is when a Pole marries a Ukrainian.

Their speech is classic Baltimorese, noted for its cavalier use - and disuse - of the letter T. The city is "Bawlamer" and a favorite word is "wunst" as in "If I told you wunst, I told you a hunnert timers."

Half the population did not get past the ninth grade and only three in 100 finished college. Half the heads of households do not own cars. Half the homes are owner-occupied.

Elaine Smith says that before SECO started organizing residents kept mostly to themselves. "Nobody bothered nobody. We'd speak on the street, but we were isolated," she recalled.

SECO's Sam Prentice offered to invite the head of the city health department to a meeting if she would hold it in her house. She didn't think anyone would show up, but 15 did.

Meetings let to more meetings. City officials said they would help if the residents would help. Smith and others started SECO's Neighborhood Preservation Program in which community workers check blocks every week and citizens' brigades tour the area with health, sanitation, and building code officials every month.

"In the first year the city issued 2,800 citaitons for code violations, made 487 people get dog licenses and killed thousands of rats," Smith said, checking her charts. "Seventy-eight house were painted."

She recalled leading a tour past a house on Pratt Street that had peeling paint. When a city official began writing a citation, the owner told her, "Mind your own business. I've lived here four years and I don't have to paint my house."

"I've lived here 40 years." she retored. "Paint your dawn house." He painted it the next month.

While Smith was organizing marches on absentee landlords who had let houses run down in her Upper Fells Point neighborhood, Matitilda Koval was organizing other cleanup brigades into a group called Community Taking Action in the adjoining Patterson Place neighborhood.

Kovak, who is also vice president of Neighborhood Housing Services (NHS), has become THE person to see if residents of Patterson Place have a problem.

"I tell them that unless they come to my CTA meetings, I won't help them," she said. "If they come, I'll help.If they miss a meeting, I'll call them and ask, 'Why weren't you at the meeting?'"

"You have to be tough," says Kovalll, who has the gentle demeanor of a Mary Worht.

NHS is another reason for SECO's success. Started in 1974, NHS has helped 245 families buy houses in a 30-block area and has aided renovation efforts at 103 other propertiesss.

Thomas Adams, executive director of NHS, says the agency sends prospective buyers and renovators to lending institutions for regular loans, helps them apply for lower-interest city or federal rehabilitation loans, or in cases of needy, deserving people, makes loans itself from a revolving fund.

Ken and Eleanor Horvitz, a young couple who both work at the Security-Ford Tractor company here, are NHS beneficiaries. On their combined $16,-500 annual income, they felt they could not afforddd a house - until they met Tom Adams.

Adams knew of an absentee landlord willing to sell a two-story house on Fayette Street for $2,300. The Horvitzes took most of their savings and bought the house outright. It needed a lot of work, and Adams helped them obtain an $11,000 federal rehabilitation loan. With it they got contractors to install a furnace, rewire the house and redo the kitchen. Deciding to handle the rest themselves, they have stripped the living room plaster and earlier this week were putting the sheet rock over the insulation.

"It'll take another month." Ken Horvitz said. "But oncce it's done, you know you did it yourself and you know what you've got."

Meanwhile, Matilda Koval has got him. He is vice president of CTA and chairman of its dance committee.

NHS here was initiated by the Federal Homee Loan Bank Board, which encourages savings and loan institutions to invest in cities. Its affiliate, the Urban Reinvestment Task Force, has set up HNS agencies in 45 communities and is developing 20 more. Baltimore's NHS was put together largely through the efforts of Howard I. Scaggs, a local S&L president; SECO leaders; Robert C. Embry Jr., then the city's housing commissioner, and the Ford Foundation.

"When we started, some blocks had ownership rates as low as 20 percent," Adams said. "Now most of them are 60 to 75 percent owner-occupied. Only 40 percent of the houses met building code standards; now 80 percent do."

SECO grew out of a protest movement started in the late 1960s by a social worker named Barbara Mikulski and others, who formed a coalition called SCAR, Southeast Community Against the Road, the eight-lane expressway that threatened to destroy much of the area.

Through protest meetings and the rejection of a bond issue, the SCAR forces won, and the roadway is now planned as a tunnel through the harbor. By 1971 Mikulski, who has since been electeed to Congress, had defeated a pro-road incumbent on the city council and SCAR had joined other groups to form SECO.

Part of SECO's continued success stems from its decision to "stop fighting the city and see it as a resource," said Embry, who is now an assistant secretary of the Department of Housing and Urban Development.

"We didn't give up confrontation per se; we just stopped some earlier organizers' techniques," said Josept B. McNeely, a one-time executive director of SECO and now director of HUD's Office of Neighborhood Development. "SECO might still picket a city official's office, but it would not throw garbage inside, as some members once did. You've got to leave people their dignity and realize that you have to deal with them once the protest is over."

Bill Ariano, SECO's current director, said the other day, "Sometimes I think we're too successful. People are always expecting us to do something new, and every time we win a fight, they say, 'Oh, well. Of course.' But the prison fight cost us $20,000 for signs, buses and mailings. To get 750 people out for a protest meeting, we had to call 7,500 people."

The National Commission on Neighborhoods, which expects to hold hearings in 15 cities this year, is starting with SECO "because it's a good example of how a neighborhood organization works well with a city," said Bob Kuttner, the commission's acting director. "The mayor (William Donald Schaefer) has been very supportive."

Commission Chairman Joseph Timilty said his group wants to "find out where positive things are happening and how they happened. We want to see what problems neighborhoods are having with federal, statttte and local policies - actions or inactions - and what can be done about them."

But before the ccommission members get bogged down in dry reportrts, Elaine Smith plans to show them a gesture of goodwill from the city to SECO: a small red maple which Baltimore officials planted last yeaar in front of her house.

"I had wanted it to comouflage the problems," she said. "Even though the city folks helped solve our problems, they gave us the tree anyway. It's bare an scrawny now, but, in a few months it'll be lovely." CAPTION: Picture 1, Elaine Smith: Before organizing, "nobody bothered nobody ... we were isolated." Photos by Ken Feil - The Washington Post; Picture 2, Eleanor and Ken Horvitz are rehabilitating the house they bought for $2.300.