What was going on when I was born?

The White House announced today that the Federal Government would encourage private industry to build and operate expendable rockets in competition with the Government's space shuttle. The announcement was described as an effort to strengthen the American space-launching capability, develop a major industry and improve the economy. John Logsdon, a space policy analyst from George Washington University, currently on leave writing a book on the space shuttle, called the step ''a significant move that allows the private sector to try its hand at competing with the Government for launch business.''

When banks were permitted to offer their own money market accounts in December, the nation's mutual funds warned that the extraordinarily high introductory rates offered by most banks to draw depositors away from the funds would not last forever. They were right. In fact, the high rates barely survived a few months. By one reckoning last week, the average rate offered on federally insured bank money market accounts nationwide, 8.13 percent, topped the average rate for mutual funds by only a quarter of a percentage point.

A teacher's aide dismissed recently after a fight with a student returned to a Long Island school yesterday wearing military fatigues and carrying a rifle, shot the youth and the principal and took 18 students hostage. Nine hours later, after releasing 17 hostages unharmed in groups and singly through the day and the evening, the gunman, 24-year-old Robert O. Wickes, fatally shot himself in the right temple while the last hostage, Bryant Lopez, 14, looked on in a second-floor classroom. Shortly afterward, the gunman's lawyer, Gerald Lotto, looking shaken, emerged from Brentwood East Junior High School, where the siege had taken place, and faced a crowd of reporters. ''He shot himself and he's dying,'' Mr. Lotto declared. ''Isn't that enough?'' Ending Daylong Drama Mr. Wickes, who shot himself at 10:15 P.M., was pronounced dead at Southside Hospital in Bay Shore at 11:41 P.M., ending a daylong drama that had turned the quiet community of Brentwood, 40 miles east of Manhattan, into turmoil. The community has 80,000 residents and the junior high school has 980 students.

Stock prices plummeted as concern spread about the outlook on interest rates. The Dow Jones industrial average closed down 15.77 points, to 1,202.98. On the overall market, declines outnumbered advances by more than 3 to 1. Analysts cited Friday's report of a recent surge in the basic money supply, which could prevent the Federal Reserve Board from encouraging lower interest rates. (Page D1.) Yields on long-term bonds rose sharply and prices fell, while in the short-term market Treasury bill yields rose very slightly. The Treasury auctioned $7.4 billion in three- and six-month bills instead of the $12.4 billion usually sold each Monday. (D13.) The dollar rose to a new high of 7.4138 against the French franc in U.S. trading. Gold prices declined $2.50 an ounce, to $438, in New York. (D18.) Prices of Treasury bond and bill futures fell sharply. (D18.)

The Lebanese-Israeli security agreement, which is to be signed in both countries Tuesday, places strict and detailed limits on the deployment of Lebanese military personnel and weapons in southern Lebanon. The accord was approved today by both the Israeli and the Lebanese Parliaments, although approval by either body was not legally required. The Israeli Parliament approved the accord by a vote of 57 to 6, with 45 members of the opposition Labor Party abstaining. In Lebanon, it was approved unanimously. According to the text of the agreement, which was made available tonight, two Lebanese Army brigades can be stationed in the southern security zone with the equipment they normally carry: 40 tanks, 18 towed 155-millimeter artillery pieces, 39 mortars and 30 antitank weapons for each brigade. No antiaircraft or ground-to-sea missiles and no military radar that can search Israeli territory will be permitted.

FIFTEEN or twenty years ago parents had few conflicts about how to deal with the sexuality of their preadolescent children: Unquestionably it was to be discouraged. Even the most enlightened parents continued to maintain a cautiously repressive attitude toward the free expression of childhood sexuality. In recent years a newly permissive attitude has set in, reflecting sociological changes of the last two decades. Parents of the past went to great lengths to discourage their children from expressing a sexual interest in their own bodies or in experimenting sexually with other children. Today, in what might be called a prosexual era, many parents have begun to feel equally uneasy about suppressing children's sexual impulses. A sense of society's evolving attitude toward children's sexuality - and parents' deep anxiety about it - pervaded hundreds of interviews with parents, children, psychiatrists and social scientists conducted in the last five years. In interview after interview it became clear that many of the most progressive parents seemed torn by opposing forces of the old and the new. The writings of a number of today's experts have contributed to that ambivalence, at least in part. They are sounding a different note from the advice given only a generation ago. Then, such advisers as Dr. Benjamin Spock or Dr. Haim Ginott endorsed in practice the ideas of past generations, with the gentle suppression of childhood sexuality still the underlying principle.

It began as a small-boat exodus of several thousand Cubans who were welcomed here as refugees from the Castro Government. As the number of refugees swelled, many Americans became increasingly upset as the Cuban Government labeled those sailing to southern Florida from the port of Mariel misfits and outcasts. Today, three years and 120,000 Cuban refugees later, experience and some success stories appear to have disproved many predictions that dire consequences would stem from this sudden injection of refugees, few of whom spoke English and most of whom possessed minimal marketable skills. Crime among adult refugees has not run rampant year in and year out, as many had feared, and crime among juveniles has fallen far short of predicitions by a local judge. Work and a pursuit of English have been taken seriously by many, according to workers involved with the refugees.

President Amin Gemayel of Lebanon said today Secretary of State George P. Shultz should return to the Middle East as soon as possible to help his country negotiate a withdrawal of Syrian forces. In an interview on the eve of the signing of the Israeli-Lebanese troop withdrawal agreement, the Lebanese President made it clear that he did not take Syria's refusal to withdraw as its final word and added that there was a good deal that Washington could offer to Damascus to help change its position. (In Washington, a senior State Department official said Mr. Shultz was inclined now to stay away from the Middle East for the present and let the Arabs take the lead in the negotiations over Lebanon. Page A13.) 'Full Support' of U.S. Sought On the withdrawal of Syria's estimated 40,000 troops in Lebanon - which is a condition for carrying out the Israeli-Lebanese accord - President Gemayel indicated that the Lebanese, acting alone, would not be able to bring about a pullout.

WHERE ships of a future day may sail, there is no air smacking of salt. There is no air at all. But a ''breeze'' does blow, a gentle force. Imperceptible though it may seem, nothing to flutter the pennant on a tall mast, this force may someday send ships scudding through interplanetary space. The force is the light of the sun, sunbeams and nothing more. Photons of sunlight have no mass but they do have momentum. They exert a pervasive pressure that can push against gossamer sails in the vacuum of space. Square sails like huge kites or long crisscrossed sails could be spread out hundreds of feet, miles perhaps, to deflect the light as if it were wind. The force of sunlight beating on the thin plastic sails should be enough to carry ships out to the moon, to asteroids and comets, to the distant planets. Solar sailing may be only a concept to build a dream on, something for another century. No government deems it worthy of financial support. But a growing number of enthusiasts, many of them engineers, are seeking to put the dream to flight in two or three years. They believe in solar sailing enough to raise money from private sources and invest their own time and talent, setting up a veritable cottage industry to develop models and prototypes of sailing rigs with which to test the dream.

A page 1 caption Saturday on the final phase of reinstallation for the Metropolitan Museum of Art's Egyptian collection incorrectly described the exhibition history of objects to be displayed. The statue of Queen Hatshepsut was on loan in Richmond between 1948 and 1961. The coffin of a court official is believed never to have been displayed before in the United States.

Andrew P. O'Rourke, the Westchester County Executive, announced today that ''substantial progress'' had been made in efforts to avert a Federal shutdown of the two nuclear plants at Indian Point because of flaws in the emergency preparedness plan. The Nuclear Regulatory Commission threatened on May 5 to shut the plants unless ''significant deficiencies'' in the plan, as reported by the Federal Emergency Management Agency, were remedied. The plants are in Buchanan in northwestern Westchester, 35 miles north of New York City. The major deficiencies it cited were the ''questionable availability'' of Westchester bus drivers in an emergency and the refusal of officials in Rockland County, across the Hudson River from Indian Point, to participate in joint planning.

Stock prices plummeted yesterday as growing concern over the interest rate outlook unsettled the market. The Dow Jones industrial average was down almost 21.96 points at 3 P.M., its low for the day. It closed off 15.77 points, at 1,202.98, after a late rally erased some of the earlier losses. The late recovery was attributed mostly to bargain hunting. Concern about the possibility of rising interest rates was also evident in the credit markets, where yields rose - sharply for bonds - as investors sold debt securities. (Page D13).