What was going on when I was born?

The chairman of the embattled General Dynamics Corporation, David S. Lewis, said yesterday that he would retire from the giant military contracting company by the end of this year. The 67-year-old Mr. Lewis made his announcement one day after the Secretary of the Navy, John F. Lehman Jr., canceled two contracts and suspended the signing of new ones at two of the company's biggest divisions. Secretary Lehman cited ''pervasive'' business misconduct by General Dynamics, which has been under investigation for fraud and deliberate overcharges on a variety of military projects. But he turned down a recommendation from the Pentagon's Inspector General to ban Mr. Lewis and two other top company officials from working on military contracts.

THURSDAY, MAY 23, 1985 Companies General Dynamics' chairman intends to retire by the end of the year. The announcement by David S. Lewis, 67, came one day after the Navy cited the defense contractor for ''pervasive'' business misconduct and said it was canceling two contracts and suspending the signing of new ones. General Dynamics has been under investigation for purported fraud and overcharges in its work for the military. Mr. Lewis will be succeeded by Stanley C. Pace, a vice chairman of TRW. [Page A1.] The Secretary of the Navy said he learned last Friday that Mr. Lewis planned to retire, but he said that did not affect the decision to impose sanctions on the company. [D6.] CBS said it would consider anti-takeover measures, including acquisitions, divestitures and recapitalization. The move reverses an earlier decision and is apparently aimed at thwarting a takeover bid by Ted Turner. [D4.]

''I have always acted in the best interest of the Navy and my country during my 64 years of military service.

The push toward interstate banking has been dealt a severe setback this week by an appeals court ruling involving the Federal Reserve Board and the U.S. Trust Company of New York, bankers and Federal regulators said today. A three-judge panel of the 11th Circuit in Atlanta ruled unanimously on Tuesday that chartering of so-called limited-service banks that permit bank holding companies to cross state boundaries was illegal because it violated the intent of Congress in the Bank Holding Act of 1956. The court reversed the Federal Reserve Board's approval in March 1984 of the bank's application to change its Florida trust company into a deposit-taking, limited-service bank. Bankers and Federal regulators said the decision, unless reversed, effectively ended the use of limited-service banks, sometimes called ''non-bank banks,'' as a means of circumventing the Federal prohibition of interstate banking.

All day long, researchers wander in and out of their glass-walled laboratory here, running the experiments that turn out several new inventions each day. They have no regular assigned hours and no dress code, and work on a bonus system with only modest fixed salaries. Outside, they can see what looks like a Japanese-style doghouse, complete with tiled roof and four cats, a tribute to the company president's affection for cats. The president is Kiyoshi Inoue, an eccentric individualist. And his two companies - Japax Inc. and Inoue Japax Research - are not only unconventional, but standouts as well in an economy where freewheeling venture businesses are rare. His companies are often cited as among the few here truly engaged in high-technology research. But he is among the first to say that in Japan, the environment for venture businesses is harsh.

Seven people were killed here early today when a fire swept through a three-story frame house, trapping the residents in their bedrooms. Hours later, the 18-year-old former boyfriend of one of the victims was arrested by Bergen County authorities and accused of starting the fire on the front porch of the house, at 39 Armory Street. The victims, from 6 to 73 years old, died as flames enveloped the house about 1:15 A.M. Minutes later five fire trucks arrived from a firehouse a block away. Five of the victims were members of the same family. Two people boarding at the house also died, and two other boarders managed to flee. One jumped from a second-floor window and another was rescued by firefighters from the roof of a rear porch as flames swirled about him.

Prime Minister Rajiv Gandhi ended two days of talks here today with praise for Soviet support of India and criticism of some American policies. He said that his visit, during which two trade accords were signed, had ''strengthened our relations and helped the cause of peace.'' The Indian leader said he had chosen the Soviet Union for his first official trip as Prime Minister because ''it has been an old friend over 30 years.'' ''We have stood together in times of trial, and we recognize that,'' he said.

Union Square Park, once a symbol of the city's grandeur and in recent years a symbol of despair, opened its newly lush, green lawns to the public yesterday after a $3.6 million restoration. It was a glorious day on which to celebrate the reopening of the renovated 152-year-old park, which had become one of the city's most sinister public spaces. A hangout for drug dealers with its graffiti-covered statues, broken benches and ripped-out street lights, the 3.6-acre park just north of 14th Street at Broadway had become a place to avoid at all costs. Not yesterday. The entire neighborhood seemed to have assembled in the park, as balloons flew and brass bands played, and Mayor Koch called it ''one of the most beautiful local parks in the world.''

The International Trade Commission held unanimously today that the domestic shoe industry had suffered serious economic damage from rising imports - a finding that could lead to import curbs and higher retail shoe prices. The five commissioners will make recommendations to President Reagan in the week of June 10 on what import protection to give domestic shoe manufacturers. Mr. Reagan could reject or accept such advice. In a counterthrust, Peter T. Mangione, president of the Footwear Retailers of America, asserted that retail prices could rise by 15 percent if imports were cut back from the principal supplier countries - Taiwan, South Korea, Brazil, Italy and Spain. George Langstaff, president of Footwear Industries of America Inc., which represents the domestic shoe manufacturers, said protection would enable the industry to spend $700 million over the next five years on advanced manufacturing equipment that would eventually lower prices.

An article on the Style page April 20 about public-library circulation of videotape cassettes misstated the policy in New York City. The New York Public Library and its branches indeed lend tapes; they have a total of about 1,850 available.

For nearly 300 years, Lloyd's of London has sold insurance backed, ultimately, by individuals. Organized into underwriting syndicates, groups of investors reaped profits when premiums outpaced claims - and promised to be personally liable, without limit, if too many disasters occurred. Now, 500 members of two of the syndicates are facing losses that could exceed $165 million, and many are refusing to pay up. The investors, including at least 10 unidentified Americans, feature such prominent figures as Adnan Kashoggi, the Saudi Arabian businessman; Jeffrey Archer, the best-selling novelist, and the Duchess of Kent.

Two Government agencies sounded an alarm today about the problem of poverty among children, saying it had ''grown deeper and more widespread'' in the last decade. About 13.8 million children, representing 22.2 percent of Americans under the age of 18, were from poor families in 1983, the last year for which complete data were available, according to a report by the two agencies, the Congressional Research Service and the Congressional Budget Office. Children make up 26.8 percent of the nation's total population, but 39.2 of all poor people are children, the report said, adding that the child poverty rate for 1983 was at ''the highest level since the mid-1960's.'' The agencies reported their findings today at a hearing of the House Ways and Means Subcommittee on Public Assistance and Unemployment Compensation.