What was going on when I was born?

''IDON'T know why people always think of the Kennedys as a Boston family,'' said Jean Kennedy Smith, sitting on her New York patio. It was the most glorious spring afternoon New York has seen this year. New York sparrows were chirping in the oak branches above, New York traffic hummed in the distance, and Mrs. Smith was there to talk about the two-day arts festival she'd helped bring to New York. ''It always made me laugh when they claimed that Bobby was a carpetbagger,'' she said of her late brother, Senator Robert F. Kennedy. ''We all grew up in Bronxville, I went to Manhattanville College of the Sacred Heart - in the old location on Convent Avenue - and I've lived here since 1962. I couldn't feel more like a New Yorker.''

A Norwegian freighter and a Staten Island ferryboat bound for Manhattan carrying 2,340 passengers collided in dense fog yesterday morning, injuring more than 60 of the ferry's passengers and causing hundreds of others to scramble for life preservers. After disentangling, the two vessels moved away under their own power. The ferry, with a hole 30 feet long and three levels high in her side, returned to the St. George terminal on Staten Island. The injured were taken by cars and ambulances to local hospitals, where all but three were released after treatment. No injuries were reported aboard the freighter, the Hoegh Orchid, owned by the Oslo-based Hoegh Line, which received a five-foot gash in her bow. The Coast Guard said the vessel was traveling from Halifax, Nova Scotia, with a general cargo, including tea and coffee from Indonesia.

An offer by Dome Petroleum Ltd. of Canada to pay $915 million for a minority stake in Conoco Inc. was made, without prior consultation with Conoco, as a way to avoid payment of capital gains taxes, insiders said yesterday. Dome's unusual approach would enable the Canadian oil company to swap the 14 million Conoco shares it wants to buy, at $65 a share, for Conoco's 53 percent block in the Hudson's Bay Oil and Gas Company. It was devised to get around a tax problem that would arise for Conoco in the exchange for the shares of Hudson's Bay, headquartered in Calgary, Alberta. The Dome proposal grew out of a problem that developed last year after Esmark Inc. sold its Vickers oil properties to the Mobil Oil Corporation. In that case, Mobil first agreed to pay Esmark $715 million for Vickers and then bought $715 million worth of Esmark stock to pay for Vickers. That ostensibly made the transaction taxfree for Esmark.

The United States ordered today that Libya close its diplomatic mission in Washington and remove the mission staff from the country. It cited ''a wide range of Libyan provocations and misconduct, including support for international terrorism.'' A statement by the State Department said that the United States was troubled by ''a general pattern of unacceptable conduct'' by Libya, which it said ''is contrary to internationally accepted standards of diplomatic behavior.'' Dean Fischer, the State Department spokesman, declined to give details. But officials said that the Reagan Administration had a list of complaints, including alleged efforts by Libyans to murder opponents of Libya's revolutionary leader, Col. Muammar el-Qaddafi, and Libyan activities in Chad, the Sudan and Egypt.

Interest rates are likely to climb and stay high for several months, Treasury Secretary Donald T. Regan said. The deficit in fiscal 1981 could be as high as $60 billion, or $2 billion to $5 billion above earlier forecasts, as a result of rate increases since March, he said. Calling this year's budget experience ''a disaster,'' he put U.S. borrowing needs in fiscal 1981 at $75 billion to $80 billion. (Page A1.) The U.S. merchandise trade deficit narrowed in the first quarter, to $3.7 billion on a balance-of-payments basis, from $6 billion in 1980's last quarter, the Commerce Department said, citing a sharp increase in exports of heavy machinery. (D2.)

The House rejected two liberal budget alternatives for the fiscal year 1982 in lopsided votes today that dramatically illustrated the liberals' loss of power. The votes, a prelude to the expected adoption of a $689 billion budget endorsed by President Reagan, followed two days of debate in which the liberals pleaded for the restoration of funds for programs they considered vital to the poor, largely in urban districts. Sponsors of the two proposals acknowledged that the alternative measures were foredoomed but insisted on introducing them as symbolic gestures. Direction Called 'Morally Wrong' ''The course the House is proceeding on is economically, politically and morally wrong, said Representative William Clay, Democrat of Missouri, ''and we in the Congressional Black Caucus will not support this insanity. We would rather lose in a cause that is morally right.''

The Hunt brothers of Dallas, Nelson Bunker and William Herbert, have been complaining on philosophical grounds for years about Government interference in their multibillion-dollar business dealings. Now, in a lawsuit against the Securities and Exchange Commission, the Hunts seem to have partially prevailed. The S.E.C. has acknowledged that it may have ''misinterpreted'' the Right to Financial Privacy Act of 1978 during a continuing investigation of the Hunts. And a source close to the Commodity Futures Trading Commission has said that the Hunts are likely to emerge unscathed from a commission investigation into commodity price manipulation. The Privacy Act requires Federal agencies to inform bank customers when their bank records are being subpoenaed.

A detective testified yesterday that Craig S. Crimmins had told him that he tried to rape Helen Hagnes and later ''killed the lady'' at the Metropolitan Opera House by kicking her off a sixth-floor roof into an air shaft. As he testified in State Supreme Court in Manhattan, the detective, Gennaro Giorgio, read from a six-page handwritten statement. The statement was based on questions he said he had asked Mr. Crimmins and answers he said Mr. Crimmins had given about what happened on the night of July 23 after a chance encounter between the 22-year-old former stagehand and the 31-year-old violinist. Dictation of the statement began just before 11 P.M. on Aug. 29 after Mr. Crimmins asked to speak to him alone, the detective said. That was nearly three hours after Mr. Crimmins was brought in to the 13th Precinct station house ''for a further interview.''

The Reagan Administration will send an envoy to Guatemala next week to discuss United States conditions for restoring military aid, State Department officials said today. Guatemala has not received United States military aid since 1977, when the military regime rejected it to protest American criticism of the country's alleged human rights abuses. President Carter withdrew the American Ambassador to Guatemala, Frank V. Ortiz Jr., last year.

An article in The Living Section yesterday on the sale of Maxim's of Paris incorrectly reported the status of Maxim's restaurant in Chicago. It is still in business.

Ian D. Sinclair, the blunt, brash business leader who forged the Canadian Pacific business empire from a large Canadian concern into an $13 billion multinational conglomerate, gave up the reins of power today - partially, at least. Mr. Sinclair, who has been chairman and chief executive officer of both Canadian Pacific Ltd. and Canadian Pacific Enterprises Ltd., resigned his titles with CP Ltd., the parent transportation company whose 100 years of corporate maneuverings are intimately tied to Canada's history. However, as an indication of his intent to retain some of his economic clout for at least another year, Mr. Sinclair, who is 67 years old, kept his titles with CP Enterprises, the diversified nontransportation arm that has moved aggressively into the United States recently. Mr. Sinclair was typically blunt on what is regarded as the end of an era in Canadian business circles. From his Montreal home, where he is recovering from a broken leg, he sent word that he had nothing to say.

''This is a horrible time. No idealism. No more talk of the disadvantaged.