The special Senate subcommittee investigating Billy Carter agreed yesterday to a hurry-up schedule of hearings aimed at taking testimony from "all principal witnesses" by the end of August.

The five democrats and four Republicans on the panel seemed just as eager, however, to avoid hearing from President Carter until after the Democratic National Convention.

Sen. Strom Thurmond (R-S.C.) said that if the president wants to testify before the convention Aug. 11 "he should be allowed to do so," but only with the understanding that he would have to undergo questioning and that he would agree to a return engagement

The president said earlier this week that he was willing and "eager" to face the committee, "and the sooner the better."

The senators made plain they have no intention of asking him until they have a firmer grasp on the evidence in the inquiry, which is just getting started.

For the week ahead, beford the convention begins, Thurmond said. "We will not be prepared to question him" with any kind of thoroughness.

At the White House, press secretary Jody Powell said he thought the committee should talk with the White House about scheduling a quick appearance by the president.

"If he goes up there and testifies, he is perfectly prepared to respond to follow-up questions," Powell said. "How that should be done would be something we would have to talk with them about."

In answer to a question from a Washington Post reporter, Powell said he was not ruling out a second appearance by the president, but did not want to make procedural policy through the newspapers.

The decision to try to finish by the end of the month drew no public dissent, but it was laced with partisan overtones. Some Senate Democrats would like to complete the hearings before the traditional start of the fall election champaign on Labor Day. At least some Republicans would like to string the inquiry out as close to election day as possible.

Under the plan agreed to yesterday, the subcommittee will begin its hearings next week with two "educational" sessions, suspend for the convention and then return for a steady round of hearings in the last two weeks of August.

The acting chief counsel of the subcommittee, Michael Davidson, said the subcommittee would then determine whether further investigations and hearings are necessary.

Sen. Bob Dole (R-Kan.) seemed skeptical of the plan, but did not quarrel with it because "I think it's flexible enough." He said he simply did not think an August ending would be possible. The subcommittee, he said at one point, doesn't even know at this point who all the "major witnesses should be."

The Senate voted only last week to begin the investigation into Billy Carter's ties to Libya and the administration's handling of the matter.The subcommittee sent out its first requests for information this week to the White House, Justice Department and other agencies that might prove helpful. So far, Davision indicated, only the Justice Department has responded, apparently with the same records temporarily loaned to the House Judiciary Committee earlier this week.

The first Senate hearing Monday is to be devoted to Libyan activities here and abroad, stopping just short of the relations between the government of Col. Muammar Qaddafi and the president's brother. David Newsom, undersecretary of state for political affairs, and Henry Schuler, a former Foreign Service officer who has lived in Libya are to testify.

A second session early Wednesday is to concentrate on the administration and enforcement of the Foreign Agents Registration Act, under which Billy Carter was forced to sign up as a Libyan agent July 14. Witnesses will be J. K. Fasick, director of the General Accounting Office's International Division, and a Justice Department official still to be designated.

The prospect of the president's testimony, and how to handle it, dominated yesterday's meeting, coming up first during an otherwise tedious discussion of the subcommittee's rules of procedure.

The proposed rules, largely modeled after those of the secretive Senate Intelligence Committee, would have permitted the taking of unsworn testimony under certain circumstances. Thurmond objected, saying he thought all witnesses should be sworn.

"There might be one exception," Dole interjected, meaning the president.

"Why?" Thurmond replied. "Why shouldn't he be sworn too? I don't think he would object to being sworn." He said he saw no reason for any witnesses to object "if they intend to tell the truth."

The subcommittee ended up adopting Chairman Birch Bayh's (D-Ind.) suggestion to require sworn testimony of all witnesses unless a majority of the nine-member panel decides otherwise.

Bayh told reporters after the meeting that he had intentionally avoided talking to the White House about the president's desire to testify."I'd rather wait until the request is made," he said.

He said the subcommittee did not want to be placed in the position of seeming to protect the president by inviting him before an unprepared panel, but, on the other hand, he suggested that it would be hard for them to turn down an explicit request from the president that he be given a hearing. t

Bayh told reporters that he had spoken with Senate Majority Leader Robert C. Byrd (D-W.Va.). about the hearings, but refused to say whether Byrd had urged him to conclude the hearings quickly.

"Sen. Byrd has emphasized to us more than once that it is our responsibility, that we should do what we think is right," Bayh said. "Sen. Byrd is concerned about our doing a good job."

The subcommittee will meet again today to discuss appointment of a chief councel to direct the investigation. Candidates reportedly include former deputy attorney general Harold Tyler. Philip Lacovara, former counsel for the Watergate special prosecutor's office, also had been approached, but said yesterday that "other commitments" precluded him from considering the post.

Sen. Charles McC. Mathias Jr. (R-Md.) said he thought it vital to get a chief counsel as soon as possible. He said he did not think the subcommittee should try to take the president's testimony until one is obtained.

Staff aides for several members of the subcommittee agreed yesterday that the tactics for handling the investigation are politically volatile. A rush job could be labeled a white-wash, while a thorough, longrunning inquiry might be viewed as a Republican effort to damage the president during the fall campaign.

Adding to the political undercurrent in the subcommittee's deliberations is the fact that four members are running for reelection this fall: Bayh, Patrick J. Leahy (D-Vt.) and Republicans Dole and Mathias.

At least one Judiciary Committee Democrat running for reelection, John C. Culver of Iowa, refused to serve on the subcommittee. But Bayh, who is facing a serious challenge from Rep. Dan Quayle, accepted the chairmanship.

Bayh told The Louisville Courier-Journal last week that his aides had warned him to steer clear of the job. "It's going to be like walking through a mine field," the senator said.

But there are also hints that Bayh might be trying to put some distance between himself and President Carter, who is expected to be beaten handily by Ronald Reagan in Indiana.

"I think looking a guy or a woman face to face is the best way to resolve this," Bayh said at one point, referring to getting the president's personal testimony.

A spokesman for opponent Quayle said yesterday that the congressman was surprised that Bayh took the job. "We're not sure how much Billy Carter's dealings with Libya mean to someone in Indiana who's unemployed. We plan to be campaigning back there on those issues."

Others involved in the organization of the subcommittee wondered whether its setup would permit an efficient investigation. "It has all the clout of a marshmallow," an aide to one subcommittee member said.

"That's because the resolution that put the subcommittee together was such a political compromise," he said. "It's a charity operation, borrowing staff from the individual members, with no independent funding."