What was going on when I was born?

James Silverstein, a 30-year-old black construction worker, was sitting on the front steps of a tin-roofed shack watching his two young children play with a rusty bicycle. ''It would change the hell out of my life,'' he said with a laugh, soul music blaring from a phonograph behind the tattered screen door. Mr. Silverstein was talking about oil money, the same thing Exxon and Saudi Arabia talk about. If a well being drilled on his father's land strikes oil or gas, he stands to receive thousands of dollars a month in royalties, perhaps over many years. Glancing at the ragged steps on which he was sitting, he added, ''I'd sure like to get me a nice, new home.'' Mr. Silverstein fervently hopes to benefit from what appears to be one of the most democratic oil and gas finds in memory. Not only are the proverbial rich getting richer, but also less affluent families all over this area, including poor blacks and Cajuns, are on the verge of becoming millionaires.

A reporter's notebook: Argentine mothers' long vigil A2 Qaddafi ends Soviet visit in gen- eral agreement A4 Truck driver confesses to killing 13 women in Britain A6 Pope's envoy in Belfast meets with Government officials A8 Around the World A9 Soweto's blacks try to ignore South African election A11 Compromise offered to avert U.S.- African confrontation at UN A12 Argentina closes border with Chile after two arrest A13 Turks ask death for rightists ac- cused of trying to take power A16 Government/Politics Justices back restriction of votes in public water district A22 Lederer quits Congress over Ab- scam conviction A24 Bell unveils plan to consolidate Federal school aid A26 Pentagon order to cut costs by re- vising purchasing policy A28 Jury begins deliberations in Sena- tor Williams trial B2 Lan withdraws from Democratic race for governor in Jersey B14 General Around the Nation A18 Hundreds block Boston's rush- hour traffic in protest of layoffs A18 Farmers elated over end to curb on grain shipments to Soviet A18 Billie Jean King sued over alleged lesbian relationship A18 Worker absenteeism disrupts service on Conrail lines B3 Industry/Labor Newspapers and guild renew talks on dual pay scale B8 Obituaries William Meiklejohn, talent agent B12 Jules C. Stein, founder of MCA Inc. B12 The Home Section Home Getting married: No place like home C1 Helpful Hardware C2 Home Beat C3 600 years of glass of Czechoslo- vakia C3 Home Improvement C4 High fashion: Dazzling day C1 The plight of embassy wives C1 Hers C2 Calendar of Events C7 Safes as combinations of art and security C8 Design Notebook C10 Parsons is given a grant to set up design center C11 Gardening C12 Arts/Entertainment "Disrobing the Bride," a play with music, staged C14 Chinese dancer married to Ameri- can detained in consulate C15 City Ballet opens season with George Balanchine's "Agon" C16 W.S. Gilbert's "Engaged" at the Manhattan Punch Line C16 South African theater is booming in four languages C17 "Rosie the Riveter," film about working women C17 Marya Marlowe gives wide-rang- ing piano recital C18 " The Meeting at Telgte" re- viewed C21 Queens College names music de- partment for Aaron Copland C21 "In for Treatment," Dutch film in "New Directors" series C32 Sports Taylor says Giants made him wel- come B14 McNeil is confident he can benefit Jets B14 Black colleges decline as source for N.F.L. draft B14 Yanks top Tigers, 3-2, on 2-run homer by Winfield B15 Celtics avoid elimination by beat- ing 76ers, 111-109 B15 Mets routed by Pirates, 10-0, for fifth straight loss B15 Islanders show their balance and versatility B15 Rangers admit lack of aggressive- ness B15 Dave Anderson on McEwen, Is- landers' ex-Ranger B16 Carlton becomes first left-hander to record 3,000 strikeouts B16 Golfers divided on merits of new tour proposals B17 Campo accents effort to win first Kentucky Derby B18 Features/Notes Notes on People C18 Going Out Guide C19 News Analysis Michael T. Kaufman on Indian- Pakistani nuclear rivalry A17 Gene I. Maeroff discusses the problems in reading education A19 Editorials/Letters/Op-Ed Editorials A30 Mr. Reagan's form, and faith Acting now to relieve 1984 There's no blinking at Medicaid Letters A30 William Safire: the Poletown wrecker's ball A31 Anthony Lewis: chaos in foreign policy A31 Bob Cary: the United States' pollution of Canada A31 Paul Craig Roberts: making defi- cits a scapegoat for inflation A31

A study by the staff of the House Banking, Finance and Urban Affairs Committee on bank lending concludes that major banks and news organizations have misled the public in the information they provide on the prime lending rate. Often, the study says, announcements of changes in the rate do not reflect actual rates that banks offer their commercial customers. The prime lending rate is often described as the rate that banks charge their best corporate customers. But the committee's survey of the nation's 10 largest banks, released today, found ''vague and imprecise definitions'' of the rate and a pattern of ''secret'' discounts to corporate borrowers, indicating that the prime rate ''is not the lowest commercial lending rate available at the banks.''

Rising interest rates, pushed up even further by the announcement of higher prime rates at severl major banks, sent stock prices tumbling yesterday. The setback included recently popular blue chips and technology high-fliers, along with most other stock groups. Increased interest rates mean higher borrowing costs for corporations, as well as an indication of severe inflationary pressures in the economy. They also drive many investors to the haven of money market funds.

Pitney Bowes, the world's largest manufacturer of postal equipment, announced today that it would build a $100 million corporate headquarters on 10 acres in the heart of this city's most depressed area. The proposed five-story, 440,000-square-foot building is to be designed by I. M. Pei & Partners for a site just blocks from where Walter H. Bowes, a businessman, and Arthur H. Pitney, an inventor, joined forces 61 years ago. The building will house the company's headquarters staff of 1,100, now dispersed at 19 sites in Stamford and elsewhere in Fairfield County. Plans for the new building were announced at a presentation attended by state and local officials, who praised the move as the start of what they said they hoped would be new development in the area. Construction is to start this summer and take three years to complete.

Letter to the President Makes a Pupil a Star

House Democratic leaders agreed today to restore money for the military in an attempt to win the support of party conservatives for their budget plan in what is shaping up as a close vote on President Reagan's budget. However, the Democratic leaders decided against proposing to balance the budget for the fiscal year 1982 by deferring reductions in personal income taxes for one year. They had been considering such a proposal as a way of attracting conservatives' support away from the Republican budget to theirs, but vote counts showed that the resulting defections of liberal Democrats would outweigh the gains among conservatives. ''It didn't buy us enough votes,'' said Representative Bill Alexander, Democrat of Arkansas, the chief deputy majority whip, who is a principal author of the budget-balancing proposal.

Robert Quarti of Kensington, Conn., decided to take advantage of a $500 rebate offer last month to buy a new Chevrolet Citation, one of the ''X'' series of cars sold by the General Motors Corporation. As he drove home from work a few days later he noticed a rattle in the dash panel. When he investigated, the whole panel slumped toward him. ''I took it to the dealer and he told me the bolts that hold it on had never been tightened at the factory,'' Mr. Quarti said. ''It's sort of disappointing to have this kind of thing happen when you pay almost $8,000 for a car.'' Mr. Quarti's experience comes at a time when the nation's automobile companies are stressing quality as never before. In doing so, they are struggling against the public perception that imported cars, particularly those from Japan, are assembled more carefully and thoroughly.

''IT'S 10 minutes after 4 - we'd better get started,'' Elena Prohaska said. So she and Burton S. Glinn took their places in front of the flower-bedecked mantel in their living room, and Richard W. Wallach, Justice of the New York State Supreme Court, pronounced them husband and wife in a simple ceremony. It was informal, but very proper, which was just what the couple wanted. The reception was equally informal, but proper. Waiters poured champagne and passed around trays of smoked salmon on pumpernickel bread to the 55 guests.

It used to be so easy. The embassy tea parties. The native dancers on the front lawn. The shopping trips to quaint bazaars. It used to be that United States Foreign Service wives knew their places: planted firmly behind their husbands and their flag. Not anymore. In 1981, being a Foreign Service wife can mean attending a cocktail party at night and searching the family car for bombs in the morning. It can mean quieting screaming children who have been awakened by gunfire. Or evacuating the family from a hostile country at 4 A.M., never to return. In an era of increasing international terrorism, the role of wife at the 275 American posts abroad has become, among other things, that of security officer. But that's not the only change facing Foreign Service families these days. The twin forces of feminism and economics have made the wife's role a skein of contradictions and frustrations.

The Bechtel family of San Francisco, which controls the Bechtel Group, one of the world's biggest engineering companies, has bought a controlling interest in Dillon, Read & Company, the Wall Street investment banking house, the two announced jointly yesterday. Stephen D. Bechtel, chairman of the Bechtel Group and of the Bechtel family's investment company, Sequoia Ventures, in a statement issued with Nicholas F. Brady, president of Dillon, Read, said that Sequoia had purchased a ''substantial'' amount of stock in the company, including the controlling shares owned by C. Douglas Dillon, 71-year-old former Treasury Secretary, and his family. Terms of the venture could not be learned, but its value - thought to be relatively small - is regarded to be of less consequence than the source of the new investment. The prestige of the Bechtel family, along with the Bechtel Group's close political ties and vast connections with both the oil industry and the Arab world, are expected to en-hance Dillon, Read's reputation as an elitist company that shuns publicity while advising a diverse list of clients ranging from the Union Oil Company of California and the City of New York to the estate of Harry Winston, the diamond merchant, and Volkswagenwerk.

The trial of Joseph M. Margiotta, the Nassau County Republican chairman, ended in a mistrial this evening. The jury, considering charges of mail fraud and extortion, remained deadlocked after 64 hours of deliberations over eight days. ''Further deliberations are pointless,'' the jury of seven men and five women -eight of them Republicans - reported in a note to Judge Charles P. Sifton in Federal District Court here. The judge set Aug. 3 for a new trial, but Mr. Margiotta's attorney, William G. Hundley of Washington, a former Justice Department official, said that he would urge the department to drop the case.