What was going on when I was born?

Six warships of the North Atlantic alliance, their gliding silhouettes cleaving the choppy bay waters and the early morning mists, sailed into New York Harbor yesterday to signal the start of the city's 1981 Harbor Festival over the Fourth of July weekend. Led by its flagship, the Dutch guided-missile frigate De Ruyter, the fleet of frigates, known as Standing Naval Force Atlantic, brought more than 1,300 officers and crew members from six NATO nations to participate in the holiday festivities, which begin today and end Sunday. Mayor Koch greeted the commander of the fleet, Commodore Jan Jacob Leeflang of the Netherlands, with the key to the city. ''What a pleasure it is to welcome the Dutch back to New Amsterdam,'' he said, ''but we will not give it back.'' The Mayor also expressed hope that the sailors would enjoy ''a vigorous and enthusiastic'' stay.

The Greek Theater of New York is inaugurating its new home at 120 West 28th Street with a production of Sophocles' ''Elektra'' in modern Greek. It stars Anna Makrakis, a leading tragedian with the National Theater of Greece, who is also directing the production. The play, described by Miss Makrakis as a ''fierce tragedy where no murder takes place on stage and yet the smell of blood is ever present,'' is the post-Trojan War drama in which Electra prods her brother, Orestes, to avenge the slaying of their father, King Agamemnon, by their mother and her lover. Performances Tuesday through Saturday evenings at 8, matinees Saturday at 2 P.M., Sunday at 3, through July 19. Tickets are $10 ($6 for students and the elderly). Reservations: 869-3530.

A Criminal Court judge who let a woman charged with murder stay at his home for the night has been censured by the State Commission on Judicial Conduct for ''extraordinarily poor judgment and a serious misunderstanding of the role of a judge in our legal system.'' The commission declared, in an 8-to-1 ruling, that the actions last November by the Brooklyn judge, Alan I. Friess, had ''compromised the judge's impartiality in the case and diminished public confidence in the court.'' ''Though respondent was motivated by compassion for the defendant, the result of his conduct was to bring the judiciary into disrepute,'' the commission said in a written opinion.

The Supreme Court ruled unanimously today that Presidents Carter and Reagan had the legal authority to carry out the agreement with Iran that ended the hostage crisis. The Court acted on the final day of its 1980-81 term, only 17 days before more than $2 billion in Iranian assets are due to be transferred out of the country under the terms of the agreement. The ruling, in which all nine Justices took part, upheld the authority of the White House to nullify court orders and to suspend private lawsuits in order to honor the settlement. Associate Justice William H. Rehnquist emphasized several times in his 31-page opinion for the Court the narrowness of the ruling and its foundation in Congressional enactments and attitudes that have developed over many years, rather than on broad constitutional precepts. ''We do not decide,'' Justice Rehnquist said, ''that the President possesses plenary power to settle claims, even as against foreign governmental entities.''

Damage claims by workers exposed to asbestos and by their families now constitute the largest, and potentially most costly, block of product liability litigation ever to confront American industry. About 25,000 people who believe they are victims have already filed 12,000 suits against 260 companies that manufacture, use or sell asbestos products, according to Michael Mealey, editor of the Asbestos Litigation Reporter. More than 400 new suits are filed each month against the Johns-Manville Corporation of Denver, once the biggest asbestos producer, by those claiming injury from exposure. That is an increase from 150 a month last summer, and as of May Johns-Manville had been named in a total of 7,200 suits, many with several plaintiffs. ''It is impossible to predict when it will peak,'' Richard B. Von Wald, Johns-Mansville's corporate counsel, said of the cases faced by the company, Resolution of the cases holds broad implications for the liability of both manufacturing companies and their insurers and for the way that American industry deals with hazardous but economically valuable materials. Asbestos is one of the most widely used mineral products, as an insulator, a coating for cables and wires, and a component of floor and ceiling tiles.

Representatives of about 60 American banks failed yesterday to endorse an agreement that had been reached to reschedule $2.7 billion in Polish debts owed this year to foreign commercial banks. Another meeting has been scheduled for next week. The meeting was held to vote on a compromise reached late last month between European bankers and a steering comittee of American bankers concerning how to deal with Polish debts. About 460 banks around the world are involved in the negotiations to reschedule a total of $13 billion owed over a number of years to foreign banks, including $1.7 billion to the American banks.

Bjorn Borg and John McEnroe left their trademarks on center court at the Wimbledon tennis tournament today and reached the men's singles final for the second consecutive year. Borg made an inspired comeback from two sets down against Jimmy Connors and completed a 3-hour-18-minute struggle by winning, 0-6, 4-6, 6-3, 6-0, 6-4. ''I was lucky to survive,'' said Borg, the Swedish player who is seeded first. The victory was the 41st in a row for Borg at Wimbledon, and, in his next match, he will be seeking a sixth straight title in men's singles here. McEnroe, seeded second, dispatched Rod Frawley, an unseeded Australian, 7-6, 6-4, 7-5, in the opening semifinal. But the three sets took almost as long to complete, three hours, as the five sets of the second match. The encounter was marked by McEnroe's being warned in the first set and then penalized 1 point in the third by the umpire, George Grime, for unsportsmanlike conduct.

The Chase Manhattan Bank and the First National Bank of Chicago raised their prime lending rates yesterday to 20 1/2 percent from 20 percent in response to this week's rise in the cost of money. A Chase spokesman said, ''The cost to the bank of the funds that it is raising in the market has increased, and the average cost of various sources of money clearly calls for a 20 1/2 percent prime.'' Yesterday's prime rate increase helped push stock prices sharply lower. The Dow Jones industrial average declined by 8.47 points, to close at 959.19. (Page D7.)

At a time when public attention has been riveted on President Reagan's tax and budget plans, his Administration has quietly set about accomplishing a sweeping reversal of policy and practice in the way the Government deals with business and individual citizens. This reversal consists mainly of lifting restrictions on business while playing down the Government's activist role as a protector of workers, consumers and minorities. It also involves a broad effort by the Administration to review and, in many cases, to modify the network of laws and reforms put into place as a result of the Watergate scandals, the civil rights movement of the 1960's and the environmental movement of the 1970's. In key Cabinet and regulatory jobs, the Reagan transformation amounts to a revolution of attitude involving the appointment of officials who in previous administrations might have been ruled out by concern over possible lack of qualifications or conflict of interest, or open hostility to the mission of the agencies they now lead. ''The common thread is one of less regulation on business enterprises,'' says E. Pendleton James, the White House personnel director. ''We are following President Reagan's policies and that is why the people we are appointing are so different from Jimmy Carter's appointees. It's a whole new ball game.''

''If we don't undertake this program, starting from today, from now, nothing can stop us from following the road to catastrophe, to a breakdown of our economy with all the consequences resulting from that. '' - Deputy Prime Minister Zbigniew Madej of Poland. (A4:2.)

The Reagan Administration today increased its pressure on the House Democratic leadership to speed up formulation of its tax package. It was announced that Senate Republican leaders would seek to push the Republican tax package through the Senate by the third week in July. There were also indications that the Administration hopes to avoid a protracted House-Senate conference on tax legislation by having the Republican and Southern Democratic floor leaders in the House of Representatives offer a bill very close to what the Senate finally approves. The announcement of the Senate timetable came today from Bob Dole, chairman of the Senate Finance Committee. The Kansas Republican said at a news conference that the Senate would take up the bill, which his committee has approved by a 19-to-1 vote, during the week of July 13. At that point, the House Ways and Means Committee is scheduled to still be working on the Democratic tax plan.

In Beirut, opening of east-west road is a major achievement A2 Uganda troops said to massacre 60 civilians in Catholic mission A3 Britain plans an advisory council from Ulster A4 Around the World A5 Government/Politics Alabama black wins a retrial A7 Democrats seek election reform A10 F.A.A. postpones a plan to shut its New York office B3 State Senate approves $500 mil- lion bond issue for prisons B5 HOLIDAY WEEKEND Independence Day is tomorrow.- Most Federal and municipal offices are closed today; New York State of- fices are open. Following are holiday schedules: Parking - Alternate-side regulations suspended today and tomorrow; all other rules in effect. Sanitation - Regular collections today; collections normally made tomorrow will be made Sunday. Federal offices - Closed today and tomorrow. State offices - Open today. Courts - Federal, state and local courts are closed today. Municipal offices - Closed today. Post offices - Open today; closed tomorrow; only special delivery and express mail delivered tomorrow. Banks - Open today. Stock and commodity markets -Closed today. Transportation - Buses and subways on regular schedule today; on Sunday schedule tomorrow. L.I.R.R. and Conrail-Harlem, Hudson and New Haven Divisions on regular schedule today; holiday schedule tomorrow. Libraries - Closed today and tomorrow.