What was going on when I was born?

In a discouraging prelude to the usually brisk Christmas selling season, the Government reported today that retail sales fell 1.5 percent last month. The decline, to $87.2 billion, was the largest since April. A 5.5 percent drop, to $26.85 billion, in sales of durable goods such as major appliances hurt the month's overall retail sales. Durable goods sales declined one-tenth of 1 percent in September, to an adjusted $28.4 billion.

Secretary of State Alexander M. Haig Jr. said today that American foreign policy sought to build a constructive relationship with Moscow while renewing traditional alliances. He also called for restoring American economic and military strength and promoting peaceful development in the third world. He made the statements in a review of the Administration's foreign policy for Excerpts from Haig speech, page A8. the House Foreign Affairs Committee. During questioning, the Secretary of State refused to rule out the possibility of a United States blockade of Nicaragua. He also declined to give assurances sought by a committee member, Representative Gerry E. Studds, Democrat of Massachusetts, that the United States would not support or encourage Nicaraguan exile groups in this country or Honduras who may be trying to weaken or overthrow the Nicaraguan Government.

A table in Business Day on Wednesday incorrectly listed 1980 third-quarter earnings per share for Miller-Wohl, a clothing chain. The correct figure is 79 cents.

Three major banks lowered their prime lending rates yesterday by half a percentage point, to 16 1/2 percent, the lowest level of the past year. Bankers and economists, who attributed the decline to the sluggish economy and to sharp declines in what banks must pay for their own money, predicted that the prime would continue to fall. ''If banks' cost of money just stays where it is for the next few weeks, the prime will not merely drop to 16 percent, but to 15 percent,'' predicted Irwin L. Kellner, senior vice president and chief economist of the Manufacturers Hanover Trust Company.

Residents of Suffolk County will no longer have to fight ring-around-the-collar without the pow-pow-power of their favorite laundry detergents. Under the wondering eyes of shoppers pushing their carts around the Waldbaum's supermarket here, the Suffolk County Executive, Peter F. Cohalan, presided today at a ceremonial bill- signing that ended a 10-year-old ban on detergents. It was the only ban of its kind in the country, according to detergent industry officials. A number of such executives who were on hand today, along with almost all the shoppers who were asked for their opinion, welcomed the change. They predicted easier washdays and more sales tax revenues for the county.

The Crocker National Corporation, by all accounts, is bursting with potential. A $500 million investment by Midland Bank Ltd. of Britain for a 51 percent stake in Crocker could catapult California's fifth-largest bank holding company, with current assets of $20.8 billion, into a banking giant with assets of more than $30 billion. Industry analysts also believe that Crocker, now the nation's 13thlargest bank holding company, could join the top 10 within two or three years. But there are nagging doubts about whether Crocker's eclectic management will be able to turn its rich potential into hard profits. ''The big question is whether managerially they can pull it off,'' said James J. McDermott, vice president of Keefe, Bruyette & Woods Inc., a securities firm that closely follows the banking industry.

Britain's "Ban the Bomb" movement gains new strength A2 France moves to close jet sale to India A3 200,000 Poles end wildcat strike, but other protests go on A3 Israeli official seems to retreat from remarks on Saudi plan A4 Around the World A5 Israelis shoot Palestinian student A6 Salvador's investigation of nuns' slaying stalled A11 Government/Politics Rights nominee not well known back home A20 Reagan tells black reporters he backs Voting Rights Act A21 F.B.I. chief backs information curb A25 White House considering further cuts in food stamp program A26 Text of Carey's message vetoing bill on tax assessments B3 Washington Talk Briefing A28 Clare Booth Luce is back in town, as peppery as ever A28 Legal Services Corporation struggles to survive A28 General Around the Nation A12 U.S. rests case in espionage trial of Polish citizen A15 Study finds higher incidence of toxic shock A19 Lease sale would permit oil drilling near New York shores B2 Health/Science Artificial genetic material used to create polio virus A12 Doubts emerge amid jubilance at second shuttle launching A31 News Analysis Hedrick Smith on David Stockman's budget remarks A1 Weekend Weekender Guide C1 An odyssey to Greek Astoria C1 Theater: Broadway C2 Guide to the best plays of Off and Off Off Broadway C1 "Mass Appeal," with Milo O'Shea, on Broadway C5 Dance: Cambodia and Okinawa troupes perform C4 Screen: At the Movies C10 "Ashram," made in India, opens C9 "Pursuit of D.B. Cooper," with Robert Duvall C11 Music: Christa Ludwig to sing lieder C5 Rolling Stones at Madison Square Garden C12 Four electric guitarists with a difference C17 Mal Waldron in concert C17 Art: Bill Jensen works at Washburn Gallery C24 Art People C25 Edvard Munch prints at Aldis Browne C26 Auctions C29 Books: "Who Killed Karen Silkwood?" is reviewed C31 Publishing C32 Restaurants C22 TV Weekend C33 Style The Evening Hours A32 Split-second timing fromoffice to party A32 Santa Fe to N.Y., by hand A32 Obituaries Jacob Rosenthal, a food and wine expert D19 Dr. Oliver A. Schaeffer, science professor and researcher D19 Sports Red Smith on the game of polo B4 Turner expresses interest in signing Jackson B5 Nets trade Woodson to Kansas City for Lacey B5 N.F.L. does own tests on some players on injured reserve B5 Princelet wins Meadowlands Cup B5 Giants short of running backs B7 Lockridge and Czyz win in first boxing card at Meadowlsands B8 Features/Notes Notes on People A24 Sports People B7 Man in the News: David A. Stockman D17 Editorials/Letters/Op-Ed Editorials A34 The cat's still out of the bag Fiasco on the farm Counterattack in Bryant Park Topics: performance tests Letters A34 Tom Wicker: a Trojan horse indeed A35 Flora Lewis: back to Mideast basics A35 James O. Goldsborough: Spain in NATO A35 Michael D. Stephens: on Sinai, there's no economics A35

The Manhattan Savings Bank said yesterday that it had made a bid to acquire the ailing Central Savings Bank, the 24th-largest savings bank in New York City. Verne S. Atwater, Central's chairman and chief executive officer, said that the bank had been looking for a merger partner for months, and that ''it's a logical move for Manhattan - I hope they will proceed with it.'' The decision will depend largely on the Federal Deposit Insurance Corporation, which insures deposits in savings banks. Because of persistent losses stemming from high interest rates, Central has been running out of reserves. During the third quarter, it lost almost $8.3 million, while its reserves amounted to only $17.7 million. At that rate of loss, Central's reserves would barely last a half year more.

The space shuttle Columbia was betrayed today by a piece of equipment that has been standard on almost every manned space flight made by Americans during the last 16 years. It is the fuel cell, which, through the chemical reaction of oxygen and hydrogen, produces all electrical power for the spacecraft. It is as familiar and mundane a fixture to an astronaut as an automobile battery is to a motorist. And until today, none had ever failed with major consequences. This time, it forced mission controllers to consider reducing the duration of Columbia's second flight, perhaps by as much as half.

The Exxon Corporation, America's largest oil company, said yesterday that it had decided to withdraw from all of its oil and gas production operations in Libya It was not immediately clear whether Exxon's decision to withdraw from Libya was the result of a dispute with the Libyan Government over oil production and prices or the result of political or security considerations. Oil industry sources said, however, that a team of Exxon officials had been in Libya in the last week discussing their contract. Exxon would neither assess the value of its operations in Libya, where it has been pumping crude oil since 1955. nor comment on whether it would receive any compensation for relinquishing them to the Government of Col. Muammar el-Qaddafi. Oil industry sources said that the Reagan Administration had not put any direct pressure on the 34 American oil companies operating in Libya to withdraw from that country. However, resolutions have been introduced in the Senate cndoalling for a boycott of Libya's crude oil as a result of that country's support of terrorist organizations.

Staff lawyers for the Federal Trade Commission may recommend a two-part plan that would enable the Mobil Corporation to go ahead with a $5 billion takeover bid for the Marathon Oil Company, sources close to the Government agency said yesterday. The plan, these sources said, called for the F.T.C. to seek additional information from Mobil about the economic impact of its takeover. But instead of enabling Mobil to proceed 10 days after it supplied the data, as provided by law, Mobil would be permitted to go ahead immediately in exchange for assurance that the two companies would be kept separate for six months while the F.T.C studied the antitrust implications of a merger. The F.T.C., which must act by midnight Saturday if it intends to prevent Mobil from proceeding with its takeover, will soon ask Mobil to supply the additional data, these sources said.

Luck plays as big a role as merit in determining which scientists get research grants from the National Science Foundation, according to a major study being published today. This conclusion was described as ''a shock'' by the authors of the study because it contradicts beliefs about the ability of scientists to agree on the value of one another's work. The findings were so surprising and so potentially damaging to the political fortunes of science that the report was held up for two years at the National Academy of Sciences while scientists argued over its validity and likely reception, according to sources close to the study who asked that they not be identified. The most dramatic aspects of the study were published in today's issue of the journal Science, published by the American Association for the Advancement of Science, and the full report has just been released by the academy.