What was going on when I was born?

Political unrest, inflation and toppling governments: These are good tidings for the International Banknote Company, a New York corporation with highly secretive operations that has made a name for itself as a printer of currency for third world nations. Fighting breaks out and a third world government falls in a coup d'etat. The new government wants the portraits of its leaders on all currency. It does not turn to a new printer; instead it orders a new batch of bills from International Banknote. Following the coup d'etat, inflation surges. That means more bills to be printed by International Banknote.

Better Reading Scores Helping to Generate Mood of Optimism By GENE I. MAEROFF The city's public school system, strengthened by apparent success in easing some of its severest problems, is preparing for Thursday's opening amid a mood of unaccustomed optimism. The situation contrasts sharply with the turbulence and uncertainty during much of the 1970's. Fiscal pressure then brought the dismissal of more than 12,000 teachers in a single year, test scores fell annually and ethnic polarization hampered educational initiatives. ''We've turned the corner and even the city officials realize it,'' said Joseph Barkan, president of the Board of Education. The school system has developed an unusually good relationship with City Hall, which controls the school budget.

Unrest in Brazil heralds storms on road to democracy A2 Brezhnev warns of Soviet coun- terbalance to neutron weapons A3 Around the World A5 Japanese starting to speak out on major foreign policy issues A9 West German says '82 budget could hurt arms plans A11 For the Bolivian peasant, politics are remote A12 Afghan official, in India, ex- pouses Kabul's new flexibility A13 Rival Dutch parties are forging a coalition painfully A15 Government/Politics Election in Michigan turns on the record of an ex-mayor A16 City primaries in Connecticut stir wide voter interest B2 Two battle for District Attorney nomination in Queens B3 The texts of Koch and Reagan speeches at Gracie Mansion B7 Reagan endorses Kean in Jersey on way to see Koch B11 Welfare rolls expected to shrink by 11 percent next month B15 Congress facing action on Social Security B17 General Around the Nation A16 Cuban Refugee Center closing after 20 years A18 Spread of fruit fly through travel- ers feared A19 Vacationers stream home after a long Labor Day weekend B1 Two faces of the Passaic River: polluted and scenic B2 3-year-old city agency assists vic- tims of crime B3 Four escapees at large after three are caught B13 Eruption at Mount St. Helens be- lieved subsiding B14 Layton defense to begin in Peo- ple's Temple murder case B19 Science Times Gene therapy: First steps toward curing the "incurable" C1 An ancient In dian refuge high on a mountain in Nevada C1 Education: Mitterrand and the French school system C1 Science Watch C2 The Doctor's World: unanswered questions about mastectomy C3 About Education: Schools often denied credit they deserve C3 Arts/Entertainment Two actors' unions are edging to- ward a merger C7 George Shearing Quintet lives again at Carnegie Hall C7 Juan Marse's novel "Golden Girl" is reviewed C10 Kissinger memoirs banned from Moscow Book Fair C11 Bill Irwin, a mime inspired by Buster Keaton C22 "People's Court," morning "re- ality" program, on WABC-TV C22 Style Notes on Fashion C6 A farsighted man of fashion steps down C6 New dimensions for an antique clothing boutique C6 Obituaries Christy Brown, Irish author who typed with toes D19 Sports Summing takes Pegasus by 2 1/2 lengths at Meadowlands D12 Rokeby Rose, Fell's 4th winner, takes Flower Bowl at Belmont D12 Gerulaitis upsets Lendl, Manson ousts Clerc in U.S. Open D13 Yankees beat Brewers and stir another controversy D13 Dave Anderson on Bob Lemon D13 Rival sanctioning groups add to boxing's confusion D13 Montanez helps Pirates down Mets, 2-1 D14 Bench hits 2 homers, Seaver wins 10th as Reds top Padres, 8-7 D14 Michael's children received news at game from Mrs. Howser D15 Steinbrenner gets mixed reviews from Yankee fans D15 Bonnett edges Waltrip in South- ern 500 auto race D17 After loss, Jets are haunted by specter of 1980 season D18 Giants' Perkins remains optimis- tic D18 U.S. gains Canada Cup semifi- nals; Perrault injured D18 Features/Notes Notes on People B9 Going Out Guide C8 Sports People D18 News Analysis John Vinocur examines strains in West German coalition A10 William Serrin weighs the Labor Day parade's implications B9 Editorials/Letters/Op-Ed Editorials A22 Tainted ballot in El Salvador For New York City Comptroller Beating the line Topics: sports deportment Letters A22 Sydney H. Schanberg: let 'em eat jellybeans A23 Tom Wicker: no infighting, please A23 William C. Coyne: wealthfare? No A23 Patricia Rachal and John T. Tier- ney: traffic in cant A23

When the Corning Glass Works announced last week that its 23.9 percent stake in the Owens-Corning Fiberglas Corporation was up for sale, the move was something of a surprise. Although Corning must unload at least 90 percent of its holdings in the huge building materials company by 1986 under a three-year old agreement settling an antitrust complaint, analysts had been expecting a tax-free stock swap. After pondering the move, however, the analysts were pleased. The sale would have a good chance of maximizing the value of the forced divestiture to Corning and its shareholders. They predicted that it would give Corning some $200 million, before taxes, to redeploy at a time when it is expanding its investment in biotechnology and anticipating rapid growth in demand for optical fibers, the hair-thin glass pipelines that allow telephone companies to send messages with light waves.

''As any worker knows, a job is the best social program there is.'' -President Reagan. (A1:6.)

International State supervision of Egypt's mosques is to be imposed as part of President Anwar el-Sadat's effort to halt sectarian strife. The gradual takeover affects 40,000 mosques. A total of 1,536 persons have been arrested and accused of inciting violence, directly or indirectly, between the Moslem majority and the Coptic Christian minority. (Page A1, Column 1.) An aid for Saudi bombing capability is being studied by a Reagan Administrationn panel. The issue, involving whether Washington should sell advanced bomb racks for Saudi Arabia's F-15 jet fighters, is not expected to be decided until late this year or early next year, according to officials. Approval of the proposed sale is regarded as unlikely. (A8:1.)

Since the Reagan Administration removed controls on crude oil prices more than seven months ago, Americans have substantially curbed their demand for petroleum, oil imports have fallen by a fifth and evidence is mounting that decontrol may help stem the long decline in United States oil production. As a result, the White House now boasts that oil decontrol - greeted with storms of disapproval when it was announced on Jan. 27 - may be the Administration's third-biggest victory, trailing only Congress's approvals of its budget and ta x proposals. ''The response has been terrific,'' Secretary of Energy James B. Edwards said in an interview. ''We're not free yet, but we're certainly moving in the right direction.'' Analysts Are Optimistic ''If we had predicted all these gains in January, everyone would have said we were just a bunch of crazy right-wingers,'' said a White House official who declined to be identified.

This cozy state capital in the limestone hills of Kentucky is providing an early indication of the kind of change that may take place in government and politics when Federal authority is returned to the states under the new federalism policies of President Reagan. A one-year trial run in which Kentucky took over an urban grant program has shown that the shift of authority from Washington is likely to add a new dimension to state government and politics, according to the authorities here. In the allocation of the money, public attention has shifted from the Washington bureaucracy to the Governor's office, they say, and this is likely to be an issue in future political campaigns. Likely Effect of Shift The trial run also indicated that the states must hire more people to administer the Federal programs and that the shift is not likely to put an end to the red tape and bureaucratic practices that have damaged many Federal programs. It is still an open question whether the states can administer the programs without fraud and abuse.

Because of an error by Kennedy Center, an article in Arts and Leisure on Sunday incorrectly identified the conductor of a performance of Leon- ard Bernstein's ''Mass'' scheduled there next Saturday. The performance will be conducted by John Mauceri.

SOME 6,000 years ago, aboriginal Americans found their way to the great meadow on Nevada's 11,949-foot Mount Jefferson, hunters from the parched lowlands in pursuit of game. They establishe d a permanentcamp, with pi t houses and hunting blinds of stone, to which they and their descend ants returned many a summer over the centuries. In time, within the last 1,000 years, families summered there, too, enduring the hard climb and fierce winds to enjoy what must have been for them an oasis of water, vegetation and bighorn sheep. The archeologist who found the mountaintop ruins calls them Alta Toquima, which he says is the highest Indian settlement ever discovered in North America.

More than 100,000 union members, from striking air traffic controllers to high-kicking Rockettes and brawny ironworkers, marched up Fifth Avenue yesterday in this city's first Labor Day Parade in 13 years. Wearing blu e collars and white collars and, in the case of the Rockettes, no collars at all, the marchers staged an enthusiastic celebration o f the labor movement's 100th anniversary and expressed their determi nation to carry on through what they said were hard times. There were cheers for one of the bigger contingents, several thousand air traffic controllers and their families. They filled five blocks near the front of the line of march and chanted,''Strike, strike, strike.''

TODAY'S athletes are bigger, stronger and faster than ever, and they are probably better trained, too. So as more athletes reach the upper plateaus of their sports, the difference between winning and losing often seems to depend on emotional, rather than physical factors. ''Though we are physically overeducated, we are emotionally undereducated,'' says Thomas Tutko, professor of psychology at San Jose State University and author of the book ''Sports Psyching: Playing Your Best Game All of the Time.'' ''You don't leave your personality, habits and attitudes behind when you walk onto the field,'' says Dr. Tutko, who has counseled a number of professional sports teams. ''The movement of every muscle involves you emotionally. And it is the emotional charge - the feeling side of sport - that makes it so fascinating, exciting and frustrating.''