What was going on when I was born?

In a new expansion of its financial empire, the American Express Company announced yesterday that it would acquire a major marketer of mutual funds and life insurance for $1 billion. The company being bought, Investors Diversified Services Inc., is the principal subsidiary of the Alleghany Corporation, and the takeover will substantially expand American Express's current sales of stock and insurance. Investors Diversified Services has a sales force of more than 4,800 people engaged in selling to customers in their homes, offices and factories. The acquisition reflects the belief of James D. Robinson 3d, chairman of American Express, that Americans will increase their savings rapidly in coming years. In a recent interview, he said his company's purchases of securities firms and banking operations - at a cost of nearly $2.5 billion since 1981 -were based on this expectation, and the parallel desire to capture as much of those savings as possible.

Gov. William A. O'Neill said today that it would be ''a week on the outside'' before the partly collapsed turnpike bridge near Greenwich would be reopened for cars. But he said repairs to accommodate trucks could take much longer. Mr. O'Neill said that it would take a year to build a permanent replacement for the bridge on the Connecticut Turnpike, also designated Interstate 95, over the Mianus River, although he hoped that trucks could begin using a temporary bridge before then. The Governor's remarks at a news conference here indicated that for several months large trucks would have to be diverted through the narrow streets of Greenwich and around the bridge site.

The Western industrialized world is entering a period of lopsided economic recovery with the United States and Japanese economies likely to perform significantly better during the next 18 months than those of Western Europe, the Organization for Economic Cooperation and Development said in its semiannual forecast released today. ''Evidence that recovery is under way is now quite clear in the U.S., and detectable - though less so and with some important differences among countries - elsewhere in the O.E.C.D.,'' Sylvia Ostry, the organization's chief economist, told a news conference when she introduced the new forecasts. The projections were contained in The Economic Outlook, the group's semiannual review of Western economic policy. But the O.E.C.D. warned that the uneven recovery now beginning in the West was still vulnerable to high American interest rates and weak demand that threaten to choke off the revival of industrial investment that is necessary if the recovery is to become selfsustaining.

The Senate gave final legislative passage today to Governor Cuomo's $1.25 billion ''Rebuild New York Bond Issue'' for transportation improvement, amid warnings that voters would reject the bond issue in November unless they were told in detail what the money would be spent on. The Senate acted at an unusual one-day cleanup session in which it also approved aid for 45 school districts, increased the minimum wage for farm workers, established a new tax-credit program to spur jobs and confirmed a number of Governor Cuomo's appointees to state posts. Except for the appointments, which required action only by the Senate, all of the legislative measures were approved by the Assembly before it completed its session June 28. 'A Magnificent System' ''This is an especially important day for New York State,'' said Governor Cuomo as the Senate convened to take up the bond issue and the other measures. ''With the Senate approval, and the approval of the state's voters in November, this bond issue will mean that New York can start repairing and strengthening a magnificent system of roads and rails which is presently threatened by deterioriation.''

Interest rate jitters caused stock market prices to plunge yesterday. In a relatively light trading session, the closely watched Dow Jones industrial average closed below the 1,200 level for the first time since June 10, dropping by 17.02, to 1,198.52, on volume of 70.2 million shares. The decline was broad-based, affecting all sectors as losers outpaced winners by 3 to 1, with 1,287 stocks on the New York Stock Exchange declining, and 418 advancing. The market's index followed the trend, closing down 1.40 at 96.04, as did the Standard & Poor's 500-stock index, which dropped 2.58, to 165.53.

Karen and John Niebling decided two years ago that they needed a new car. But when they piled their two children into their 1977 Chevrolet Malibu and made the rounds of dealers they were shocked - not by high sticker prices but by high interest rates on new-car loans. ''Between those interest rates and my husband's salary,'' Mrs. Niebling said today, ''there was no way.'' Last week the Nieblings made the rounds again, and this time they ordered a new Chevrolet Caprice with air-conditioning, wire wheel covers and a sticker price of $10,186.

American Express will acquire Investors Diversified Services, the principal subsidiary of Alleghany, for $1 billion. The acquisition will add substantially to American Express's insurance and stock sales. (Page A1.) Some analysts feel I.D.S. has successfully diversified and may be on the rebound. (D21.) The acquisition symbolizes the vast changes under way in the American financial system. (D21.) Chrysler plans to repay all $800 million of its federally guaranteed debt by the end of 1983, according to sources in Detroit and in the financial community. They said the announcement is to be made today in Washington by Lee A. Iacocca, Chrysler's chairman. (D1.)

House Democratic leaders said today that a subcommittee's investigation of conduct in the 1980 Presidential campaign would be perceived as partisan and divert attention from the fundamental flaws of the Reagan Presidency. But the subcommittee, at its first meeting since the start of the investigation, informally agreed to press ahead, overriding the objection of a Republican member that it lacked jurisdiction and was engaged in ''a fishing expedition.'' James Hamilton, who served as an aide to the Senate Watergate committee, and is being considered as special counsel to conduct the investigation, attended the meeting. Meeting with reporters, Representative Thomas P. O'Neill Jr. of Massachusetts, the Speaker of the House, repeated his opposition to the investigation, which is being carried out by the Human Resources Subcommittee of the House Post Office and Civil Service Committee. The subcommittee is investigating how the Reagan campaign staff came into possession of Carter campaign material before a televised debate in 1980.

An article in Science Times yester- day on the particle accelerator pro- gram at Brookhaven National Labo- ratory misstated part of a subcommit- tee recommendation of the High Energy Physics Advisory Panel of the Department of Energy. In urging the development of a larger, more power- ful machine than the one now being built, the panel left open the question of who would build it.

The United States has told Poland that it would take steps to relax some of the sanctions imposed at the time martial law was declared in 1981 if Warsaw released a significant number of political prisoners, it was reported today. This message was conveyed to Poland's charge d'affaires, Zdzislaw Ludwiczak, by Lawrence S. Eagleburger, the Under Secretary of State for Political Affairs, last week, in the most substantive meeting between the two sides in many months. The report did not originate with the Administration, but was confirmed by Administration officials today. Hoping to lend encouragement to Polish authorities to carry out some liberalizing steps in coming weeks, the Reagan Administration told the Poles that if substantial numbers of political prisoners were released, the United States would agree to join with other Western nations, members of the so-called Paris Club, on July 29 to consider rescheduling Poland's outstanding debt to Western nations, thereby allowing Poland to be eligible again for Western loans.

The windows on the 11th floor of Babies Hospital look out over New York - an awesome vision of grays and blacks. It is the only view of the world Taina Cabreja ever gets. Taina was born two and a half years ago in the hospital, part of the Columbia-Presbyterian Medical Center, and she has never left. Her only notion of home is a room with four institutional cribs. Her only friends are two other sick children who, like Taina, have spent more time with nurses and doctors than with their mothers. Ask Taina, ''Who is a girl's best friend?'' and she gives the answer the nurses have taught her: ''Diamonds.'' Ask her, ''Who's the boss?'' and she names the unit's head nurse. Ask her to ''do a seizure,'' as an intern did on a routine visit the other day, and she clenches her teeth in a frozen smile.

International An effort to spur Poland's authorities to ease martial law restrictions has been initiated by the Reagan Administration, according to Polish informants and Administration officials. They said Poland's charge d'affaires had been told that Washington would take steps to relax some of the sanctions it imposed when martial law was declared in 1981 if Warsaw released a significant number of political prisoners. (Page A1, Column 6.) The future of Hong Kong when the British lease over most of the colony expires in 1997 was the subject of a new round of confidential Chinese-British negotiations that opened in Peking. The discussions are scheduled to end today. (A3:1-3.)