What was going on when I was born?

To most people in the lower half of Manhattan, Manhattan Cable Television is an entertainment company. But to banks and large companies, Manhattan Cable is also a telephone company. Those banks can use the cable, instead of New York Telephone lines, to send data from one of their buildings to another. And if John Gault, president of the cable company, has his way, those businesses will also be able to use the cable to communicate by voice from one of their buildings to another. Manhattan Cable is at the forefront of change in the telephone business. The last vestige of the American Telephone and Telegraph Company's near-monopoly - local telephone service -is being pierced.

At a point when economists of various leanings are urging President Reagan to take steps to calm the financial markets and thereby bring down interest rates, the Administration contends that the President is already responding with substantial efforts to keep Federal spending in check. Administration officials say the entire tenor of current discussions over the Defense Department budget has changed because of the Administration's renewed determination to bring down projected Federal deficits and achieve a balanced Federal budget in 1984. In budget cutting, military spending had heretofore been considered untouchable - as officials openly and repeatedly stated - but now it is subject to cuts, they say. Further, according to Edwin L. Dale Jr., spokesman for the Office of Management and Budget, the Administration's budget officers are warning Congressional appropriations committees that the Administration will insist on cuts in projected spending greater than those envisaged by the budget bill approved by Congress last month. Vetos of appropriation bills are being threatened.

International Jimmy Carter praised the policy of the Reagan Administration toward China as ''compatible'' with his own. The former President, who is visiting China, said that, if he were still in the White House, he would also have offered to sell defensive weapons to the Chinese as President Reagan has proposed. (Page A1, Columns 4-5.) Washington warned North Korea of ''serious concern'' over the firing of a North Korean antiaircraft missile at an Air Force high-flying reconnaissance craft Wednesday and vowed that the United States would take all steps necessary to assure the safety of its pilots and planes. (A1:5-6.)

Canadian air traffic controllers asked the Canadian Government today to stop all flights between Canada and the United States, but the Government refused. The controllers' union, the Canadian Air Traffic Control Association, charged that flying conditions in the United States were unsafe because of the continuing strike by their American colleagues. William Robertson, the union's president, referred to more than three dozen air incidents that, he said, proved the lack of safety.

The United States expressed ''serious concern'' today over the firing of a North Korean antiaircraft missile at an Air Force reconnaissance plane yesterday. Washington also warned that it would take ''whatever steps are necessary to assure the future safety of our pilots and planes.'' The American statement, issued by the State Department, was accompanied by a call for a special meeting of the Korean Military Armistice Commission to meet at Panmunjom in the demilitarized zone between North and South Korea on Saturday to discuss the incident. Dean Fischer, the State Department spokesman, said the United States was able to ''confirm'' that North Korea ''fired a missile at a U.S. Air Force plane flying in South Korean and international air space.'' He said it was one of a number of ''routine'' flights conducted for years in the region.

A Congressional Democrat said today that he had reliable information that the Reagan Administration was preparing to seek additional large cuts in education aid for inner-city children. An authorization ceiling of $3.48 billion in spending for disadvantaged students under Title I of the education act was set by Congress for the fiscal year 1982. Representative Peter A. Peyser of Westchester County said today that he had reliable information that additional cuts of as much as $2 billion would be sought in the Title I program at the behest of David A. Stockman, President Reagan's budget director. Peyser Sees 'Double-Dealing' Mr. Peyser accused the White House of ''double-dealing'' in trying to go beyond the cuts that Mr. Reagan won last month in the budget reconciliation fight with Congress.

THERE are millions of New Yorkers who come from Latin countries - Puerto Rico above all, but also the Dominican Republic, Cuba and the other countries in the Caribbean and Central and South America. These millions make music, and that music has an active subculture life of its own. Latin musicians have their own record companies, clubs and concert circuits. And if they hope lingeringly for a ''cross-over'' hit that will sell in the millions, the best of them do well enough playing almost exclusively for Latin audiences. But this weekend and next week sees the coincidental and competitive, pairing of two important Latin festivals designed to showcase this music not only for its own audiences but also for non-Latin aficionados. Tonight and Sunday will be the second and last shows of the 1981 Latin American Jazz Festival, a new venture. Starting next Wednesday and continuing through Labor Day, there will be El Festival Latino Kool. This is an expanded version of the New York Salsa Festival,now in its sixth year. This year the format is being modeled on the former Newport in New York, now Kool Jazz Festival.

Like many of the New Yorkers who ride them each day, the city's subway trains got off to another coughing, sputtering, lazy start early the other morning. It was 5:30 A.M. Wednesday at the train yard in the Westchester section of the Bronx, the home of the 430 graffiti-marred IRT cars that travel the No. 6 line. The line carries passengers between the Bronx and the Brooklyn Bridge, making local stops along Manhattan's East Side. In the darkness, inspectors carrying panes of glass walked cautiously over the tracks that crisscross the 35-acre yard. The inspectors are supposed to check items that bedevil passengers - malfunctioning doors, lights and destination signs - but they spend most of their time replacing windows kicked out by vandals. In the week ended Aug. 23, 423 window panes were replaced in the system.

Diplomatic maneuvering under way in Indian subcontinent A2 Sihanouk and Pol Pot leader to meet in Singapore A2 Israeli-Egyptian accord catches U.S. off guard A3 Angola reports heavy fighting with South African force A3 Around the World A5 Bonn's ruling party debates U.S. military influence A8 Salvadoran accused of killing two Americans ordered released A9 British law curbs questioning of jurors D16 Government/Politics Subway inspectors find it tough to keep up with the vandals B1 Members of Congress find summer recess a busman's holiday B2 Casey amends list of law clients submitted to Senate D16 General Around the Nation A10 Long-standing housing dispute in Michigan goes to court A10 Expansion of Unification Church worries Gloucester, Mass A10 Fugitive denies Green Berets trained terrorists in Libya A11 The Region B2 Two officers wounded and 20 suspects seized in drug raids B2 The city B3 The arrest of Roy Innis was another turn in CORE's history B3 The body of a Queens man is exhumed in Maine B3 New York City arson rate seems at least to be staying level B3 Education/Welfare Tiny town saves its school through importing pupils A24 Health/Science Problems persist with a camera platform on Voyager 2 B5 Weekend Weekender Guide C1 Concert Parties mark five years C10 The big fair in Dutchess County C13 Art: Museums in the countryside C1 The things that can happen to a print C18 Auctions C19 Theater: Broadway C2 "The Hotel Play," with cast of 70, at La Mama C3 New Face: John Vickery of "Henry IV, Part 1" C20 Music: Latin jazz thriving in two festivals C1 Earl (Fatha) Hines stomping along at 75 C5 A date with Judy Collins at the Savoy C5 Harry Belafonte singing in Jersey C22 Melba Liston heads last weekend of jazz at Seaport C24 Screen: "Gallipoli" from Australia opens C6 At the Movies C6 1940's-style "Body Heat," with William Hurt C14 Books: Publishing C20 "The Beechers" by Milton Rugoff reviewed C21 Andrea Levine, pirouetting into tap C22 Restaurants C16 TV Weekend C23 Style The Evening Hours B6 On Columbus, The First Avenue of the West Side B6 S.A.T. Coaching Is on the Rise B6 Obituaries Anita Loos's friends say farewell, with joy she asked B8 Audrey McMahon, administrator of W.P.A. arts project B8 Sports White Sox top Yankees, 3-1, in rain-shortened game A15 Jackson undergoes tests, confers by phone with Steinbrenner A15 Mets rally in 8th and beat Astros, 3-2 A15 Three share lead at 68 in World Series of Golf A15 India working to change its lagging sports image A15 Red Smith on Shelly Silverman A17 Carpenter, schoolboy star, signs with Capitals of N.H.L. A18 Lutz, reporting an injury, withdraws from U.S. Open A18 4 seeded players ousted in Jersey tennis A18 McNeil moves toward Jet starting role A18 Louis Jackson getting bigger role in Giant backfield A18 Features/Notes Notes on People A18 Man in the News: C. Edward Acker takes top job at Pan Am D1 News Analysis Henry Scott Stokes on Japan's foreign nonpolicy A6 Editorials/Letters/Op-Ed Editorials A22 The energy crisis eases Cash for drug enforcement Roger Baldwin's legacy Topics: two steps forward Letters A22 Tom Wicker: rethinking the MX (2) A23 Flora Lewis: the Maltese exam- ple A23 Eleanor M. LeCain: a solution for Poland A23 Arthur H. Barnes: a myopic study of crime A23

Time Inc. further solidified its already sizable cable television presence by agreeing yesterday to buy at least a 50 percent interest in the USA Network, the country's third-largest advertiser-supported cable service. Time agreed to buy the half of the network that is owned by UA-Columbia Cablevision for a price that UA-Columbia said was $15 million in cash. The other 50 percent, owned by Madison Square Garden Productions, is expected to be acquired by the Paramount Pictures Corporation. Paramount and Time would then form a joint venture to operate the network.

The Cooper-Hewitt Museum, the stately pile at 2 East 91st Street that once was Andrew Carnegie's mansion, has two new exhibitions: one of magazine covers, the other of glass. The 130 magazine covers are both European and American, and while some are of recent times, others reach back to the emergence of the illustrated periodical in the mid-1800's. Has commerical art gotten more interesting since then? The Cooper-Hewitt collection will persuade you it has not. The glass exhibition, meanwhile, is all recent - studio pieces that have been blown, cast, fabricated and engraved by 75 American artists. Besides the magazine covers and glass there are all the Cooper-Hewitt's standbys: drawings, prints, textiles, furniture and wallpaper, not to mention bird-cages, book papers and trade cards. The museum, which is also the Smithsonian Institution's National Museum of Design, is open today 10 A.M. to 5 P.M. Admission is $1.50 for adults and $1 for students.

''I was thinking about finding a more challenging job,'' said C. Edward Acker, ''and I asked about being the captain of the Titanic. But they said I was years too late. So I decided to take the job of Pan Am chairman.'' With that quip Charles Edward Acker, chairman of Air Florida, explained why he had accepted an offer from the board of the foundering Pan American World Airways to assume its chairmanship Sept. 1, replacing William T. Seawell.