What was going on when I was born?

The dollar scored a modest recovery yesterday after two days in which it fell precipitously. Despite limited intervention by the the Bundesbank, the West German central bank, the dollar rose slowly and steadily because of considerable demand at its lower levels. After several days in which traders said that they had no idea what would happen next, a consensus seemed to be forming that the dollar would continue to rise. Traders were reassured that the dollar's fall this week had been checked by renewed demand at lower exchange rates, and that it rose yesterday notwithstanding the announcement of a large trade deficit in January.

THAT Henri Matisse was one of the most seductive draftsmen who ever lived is well known to anyone who patrols the auction houses and the dealers' galleries. Rarely have drawings been more instantly approachable than the kind of Matisse that turns up for sale here, there and everywhere. Those drawings have, as he himself wished them to have, ''the lightness and joyousness of a springtime that never lets anyone suspect how much hard work has gone into it.'' The pretty young women, dressed or undressed, the Mediterranean fruit fresh from the tree, the flowers that we never get to buy in the stores - all these were rendered by Matisse with a sovereign dexterity that makes them among the most immediately covetable of European drawings.

A $488 million rebuilding plan for Mount Sinai Medical Center that includes a new 633-bed hospital wing and a large new emergency room was approved by the state yesterday. The approval, in a unanimous vote by the New York State Hospital Review and Planning Council, came after four years of tough negotiations with state and local health planners who had opposed Mount Sinai's initial plan. They ultimately persuaded the hospital to agree to a less expensive renovation and to accept a larger role in meeting the basic health needs of the Upper East Side's poor, predominantly black and Hispanic communities. According to state health officials, the plan that was approved reflected Governor Cuomo's determination to force New York City's major teaching hospitals and medical centers to assume direct responsibility for the health care of their surrounding neighborhoods and to insure that any new construction fulfilled regional needs.

District Attorney Robert M. Morgenthau of Manhattan said yesterday that he was considering asking a new grand jury to decide whether to indict Bernhard H. Goetz on charges of attempted murder in the shooting of four young men on a subway train. In January, a grand jury indicted Mr. Goetz only for illegal weapons possession, although prosecutors had said there were legal grounds for charges of attempted murder. That grand jury's term has since expired. ''We have been considering re- presenting from the day the indictment was voted,'' Mr. Morgenthau said yesterday in a telephone interview. ''But just because a prosecutor is not happy over a grand jury action is not a basis for re-presenting. We're not interested in tilting at windmills. I've got to have a substantial basis for doing it.''

CABARET has had its ups and downs in New York over the years. But recently, as the price of Broadway shows has soared and disco fever cooled, a wider audience has begun seeking the alternative of nightclub entertainment. Activity has become so busy and diverse that many are calling the mid-80's a ''golden age'' of cabaret, comparable to the period just after World War II. Comedy is flourishing as never before, with stand-up comedy and ensemble improvisation booming in more than a dozen clubs. The revue, which seemed dormant just a few years ago, has made a striking comeback. Jazz is thriving, and folk music is building a new, young grass-roots audience. Estimates of the number of piano bars in Manhattan now exceed 100. Recognizing all this ferment, Mayor Koch has proclaimed March Cabaret Month. In ceremonies marking the occasion Monday at the Ballroom - sponsored by Remy Martin and presented by the Manhattan Association of Cabarets, a group of 14 local clubs - Cab Calloway, Barbara Cook, and Jerry Stiller and Anne Meara were honored with lifetime achievement awards.

In defiance of the national party leadership, a group of Democratic officeholders from the South and West today announced the formation of an independent council to help shape party policy and rules. At a news conference on Capitol Hill, organizers of the group, the Democratic Leadership Council, said many elected officials who viewed the national party as a political liability in their regions had expressed support for the initiative. ''We view the council not as a rival to any other party entity but as a way station or bridge back into the party for elected Democrats,'' said Representative Richard A. Gephardt of Missouri, who will serve as chairman. Reaction to Reagan Victory Other leaders include Senator Sam Nunn of Georgia, Senator Lawton Chiles of Florida, Representative James R. Jones of Oklahoma, Gov. Charles S. Robb of Virginia and Gov. Bruce Babbitt of Arizona. So far, they said, the council's membership includes 10 governors, 14 senators and 18 representatives, many of whom want to push the party in a conservative direction after last year's landslide victory by President Reagan.

FRIDAY, MARCH 1, 1985 Markets The dollar rebounded modestly after two days of declines. It rose despite limited Bundesbank intervention, and traders were reassured when demand picked up at the lower rates. Gold fell $1, to about $287, in late New York trading. (Page D1.) Commodities regulators charged the Hunt brothers with manipulating the silver market in 1979 and 1980. The complaint is the latest reversal for the family, which has seen its fortunes plummet since the silver crisis of 1980. The Hunts said the ''thrust of the alleged charges are baseless.'' (D1.)

Ted Turner, the owner of the Atlanta-based Turner Broadcasting System Inc., is planning to seek a takeover of the CBS television network, sources at the Federal Communications Commission said tonight. The sources, who spoke on the condition they not be identified, said attorneys for Mr. Turner had spent several days in Washington making presentations to each of the five commissioners. ''They were advised that Mr. Turner has the intention of taking over CBS,'' one of the sources said, adding that no formal proposal had been presented. Mark S. Fowler, chairman of the commission, said tonight that he could not comment on the reports, and he declined to speculate how the commission would respond if such a bid were made.

A Chrysler Corporation executive said today that his company was planning to import 200,000 more cars a year from its Japanese affiliate, the Mitsubishi Motors Corporation, to sell in this country. Testifying before the House Ways and Means Committee in Washington, Robert S. Miller, Chrysler's executive vice president for finance, said the company would place the order in a few days, even though the White House has not decided whether to extend the restraints on imports of cars from Japan. ''In our estimation, the restraints are coming off,'' Baron Bates, a Chrysler spokesman, said. ''Even if they are extended, there will be an increase in the number of cars allowed, so we decided not to wait any longer.'' If the restraints do continue, Chrysler would not be able to import as many extra cars as it plans.

FRIDAY, MARCH 1, 1985 International Readiness to return to the peace process in the Middle East in any way the Arabs and Israelis think appropriate was expressed by the Reagan Administration. (Page A1, Column 6.) Nicaragua's latest peace overtures were labeled by the White House as a ''change without substance.'' But Secretary of State George P. Shultz appeared to leave the door open for a meeting with President Daniel Ortega Saavedra. (A8:1-3.)

La Mama, E.T.C. (74A East Fourth Street) is presenting the American premiere of ''Kafka: Father & Son'' by Mark Rozovsky, a Soviet playwright and director known in New York for his 1980 Broadway play ''Strider - Story of a Horse.'' The current show, now in previews, is based on Kafka's short story ''The Judgment'' - a fantasy in which a father ''sentences'' his son to death - and on a letter that Kafka wrote to his father about their troubled relationship. Wednesdays through Sundays at 7:30 P.M. through March 24. Tickets: $8 ($6 for students and over-65's). To charge: 475-7710. RARE READING BY JAMES BALDWIN James Baldwin will make a rare public appearance in New York tonight at 8. He will read from and discuss his work at ''The Writer's Voice,'' which sponsors literary events at the West Side Y.M.C.A., 5 West 63d Street. There was no word on which of his books he will choose. Mr. Baldwin, whose first novel was ''Go Tell It on the Mountain'' (1953), has published more than 16 books and is finishing another, based on the Atlanta child murders. Tickets: $10 (available through Ticketron, 977-9020, and Teletron, 947-5850). Information: 787-6557. Saturday UKRAINIAN EASTER EGGS

The Thursday Sports listing in the Sports Pages yesterday misidentified the player who previously held the record for goals by an American-born player in one National Hockey League season. He was Joey Mullen.