What was going on when I was born?

MONDAY, JULY 23, 1984 Companies Continental Illinois released an internal report that said there was a ''breakdown'' in its lending controls in the early 1980's. The bank's board is to hold its regular monthly meeting today, but may not reach agreement on a proposed rescue package. (Page D1.)

ANDERSON, Ind. Were it possible to ignore the past, he would have appeared to be just another talented, young quarterback, working hard in training camp, trying to remain as a member of the 1984 Indianapolis Colts. Play after play, he dropped back quickly, set up smoothly and fired tight spirals that generally reached the receiver at the precise time and place downfield. Yet just as Art Schlichter could not escape the admiring glances of coaches and scores of fans beside the field at the Colts' training headquarters at Anderson College, he cannot escape the pain of his past, a problem with gambling that left him out of football and worried that he might never again be allowed to play in the National Football League.

Corporate profits in the second quarter rose less robustly than in the first quarter, offering a new sign that the economy was expanding at a less- frenzied pace. But, based on the initial wave of second-quarter results and what analysts expect of those to come, profits were still stronger than at this stage of earlier recoveries. Many economists expect the Commerce Department's revised estimate of economic growth in the April- June period, to be released today, to exceed the initial ''flash'' estimate of a 5.7 increase. First-quarter growth is put at 9.7 percent.

Congress will reconvene Monday for a three- week session between the Democratic and the Republican national conventions facing an array of unfinished business, including an overhaul of the immigration laws and military aid to Central America. Before it recessed for the Democratic convention, Congress achieved an unexpected degree of bipartisanship on major legislative initiatives. The question now is whether bipartisan compromises will continue or whether the political pressures of an election year will make further legislative progress this year impossible. There is little optimism that the immigration and the military budget measures leading the work list can be completed before the recess for the Republican National Convention. Congress will return after Labor Day and is scheduled to adjourn Oct. 4 to let its members campaign for re-election.

Many consumers will benefit from lower-priced prescriptions in the next few years as the pharmaceutical industry undergoes a fundamental change. Some of the industry's most profitable drugs will lose their patent protection, opening the way to competition from cheaper generic copies. The American Home Products Corporation's heart drug Inderal, which had sales of $335 million last year, will lose its patent protection in September. Inderal's generic name is propranolol hydrochloride.

Seve Ballesteros of Spain won the British Open for the second time today in an exciting duel with Tom Watson that was settled on the famous Road Hole, No. 17, of the St. Andrews Old Course. Ballesteros shot a par 4 on the 17th and Watson overshot the green for a bogey 5. That broke a tie created when Ballesteros birdied the 14th hole. After parring the 17th - the first time he had done so in the tournament - Ballesteros birdied the 18th with a 15-foot putt and thus won by two shots. Watson, playing in the final group of two right behind Ballesteros, parred the final hole and slipped to a tie for second with Bernhard Langer of West Germany.

Vanessa Williams, responding to the disclosure that she had posed for nude photographs with another woman and might lose her Miss America title because of them, said today that she had acted out of curiosity and had never consented to having the photographs published. ''This is the worst thing that ever happened to me,'' Miss Williams said in an emotional hour-and-a-half interview at the home of a friend in this Westchester County community. ''For a 21-year-old person to go through such national attention, such a catharsis in public, is really awful.'' Magazine Says It Has Release On Friday, officials of the pageant informed Miss Williams's attorney that they wanted her to resign within 72 hours because the photographs, which are in the September edition of Penthouse magazine, violated the wholesome image expected of Miss America. It was the first time in the 57-year history of the Miss America Pageant that a winner has been asked to step down.

''We're slowly but surely moving into the 20th century, but by the time we get there, it will be the 21st.'' - Kathleen Shields, supervisor of the Immigration and Naturalization Service's information unit. (A1:3.)

The New York district office of the Immigration and Naturalization Service is understaffed, buried in paper work and overwhelmed by antiquated procedures, according to many specialists in the field. Moreover, they say, there will be a torrent of new work if Congress approves new immigration legislation. Despite some innovations over the last few years, the agency, which handles the largest workload of any district office in the country, simply does not have the resources to keep up with the volume, according to Government officials, private experts who deal regularly with the agency and aliens themselves. ''We're slowly but surely moving into the 20th century,'' said Kathleen Shields, supervisor of the immigration service's information unit. ''But by the time we get there, it will be the 21st.''

A huge increase in steel and copper imports coming through the old and until now declining seaports of southern Connecticut is transforming them into bustling arenas of new economic growth. The Connecticut ports - principally in New Haven and Bridgeport - are benefiting from the same economic forces that are crippling the United States copper and steel industries: As Latin America, Africa and the Far East have been flooding the American market with the two metals, domestic production has declined. ''The misfortune of the Midwest has made our ports into hotbeds of expansion,'' said Peter F. Burns, deputy commissioner of Connecticut's Department of Economic Development. But at the same time the rapid growth of imports has made the Bridgeport and New Haven ports vulnerable as the Reagan Administration considers import restrictions proposed by the steel and copper industries. Tougher restrictions have also been recommended by the International Trade Commission, an influential Federal agency that advises the President.

In the seven months since Samuel J. Heyman won a fierce proxy fight to become chairman of the troubled GAF Corporation, the company's fortunes have brightened. But to those who were listening to Mr. Heyman a year ago, the upturn may seem ironic. Through most of 1983, Mr. Heyman tried to put pressure on GAF, a roofing and chemicals company, to sell some large assets, including specialty chemicals, its biggest business. The company makes chemicals derived from acetylene that are used in plastics, pharmaceuticals, cosmetics and other products.

Victory for Israel's Labor Party in today's election for Parliament was predicted by the country's major pollsters. One of the polls indicated that the Labor opposition would win 48 seats and the governing Likud bloc would get 41. Neither party is expected to win enough seats to form a government on its own. (Page A1, Column 6.) Iran wants to re-establish contacts with the West, West Germany's Foreign Minister said. He said the Government has expressed the ''clear wish'' for reviving contacts, but that it was ''open'' as to whether the Iranians were thinking about returning to speaking terms with the United States. (A1:4.)