What was going on when I was born?

The basic measure of the nation's money supply surged by $4 billion in the week ended July 1, the Federal Reserve reported yesterday. The rise was double what economists had anticipated and dashed hopes that the Fed would move soon to help push interest rates lower. The credit markets, which were depressed throughout the session on fears of a large increase in the money supply, fell sharply after the late-afternoon report was released. Some of the losses were quickly trimmed back after bond traders were comforted by other figures in the Fed report showing more moderate increases in the broader measures of money supply growth. Nevertheless, prices on long-term Government bonds still lost nearly a point on the day.

The Senate approved legislation tonight imposing economic sanctions on the Government of South Africa. The vote was 80 to 12. The action means that Congress is likely, for the first time, to approve sanctions intended to force the South African Government to change apartheid. Such a move would be a major rebuff for the Reagan Administration, which has followed a policy that it calls constructive engagement, which is intended to seek change in South Africa's racial policies by diplomatic persuasion, not by confrontation.

NEW YORK is a city whose natives sail on the water, travel above and under it, romp, swim and fish in it, and just look dreamily at it. New York is no more Venice by the Sea than it is Baghdad on the Subway, but little in New York, from its people to its arts to its commerce to the city itself, would exist were it not for the confluence of ocean, bay, rivers and sound that also turn the water's edge into a great weekend playground. So those who aren't on their way to Venice this weekend might stroll along the rim of New York harbor, that capacious haven extending from the craggy New Jersey cliffs to the gently shelving beaches of the Rockaways. There is something for the exerciser and for the daydreamer. And where water washes up on the shore, there is always a prize-winning shot in wait for the photographer, whether the lens is pointed toward the Manhattan skyline or at the yachts, ferries, tugs, sailboats or occasional freighters and tankers bound in or out of the harbor. The history-minded will be rewarded by a pilgrimage to the harbor fronts. For example, he can forage among the remains of the South Street Seaport, from where American clippers sailed.

The descendants of Levi Strauss, who 135 years ago started a tiny company by making canvas pants for miners, may move soon to recapture ownership of what has become the world's largest apparel maker. The San Francisco-based Levi Strauss & Company said yesterday that Robert D. Haas, the 42-year-old president and chief executive officer, and other descendants of Levi Strauss, were exploring making a $50-a-share leveraged buyout proposal, valued at $1 billion, which would take the company private. Mr. Haas is a great-great-grandnephew of the founder. The news sent Levi Strauss's common up $8.50 a share on the New York Stock Exchange yesterday to close at $45.50, on volume of 434,000 shares. Analysts suggested that yesterday's big jump in value reflected confidence among arbitragers that Levi Strauss would go through with the buyout proposal, and even if it did not, the stock would remain at the higher level.

''We've heard the arguments about merit pay for at least 50 years and the issue does not go away.

The Helpful Hardware column in The Home Section yesterday gave an incorrect telephone number for the David Kay Garden and Gift Catalogue. The number is 800-621-5199.

Israeli agents, aided by former Nazis, tracked Josef Mengele to Paraguay and then to a Brazilian farm in 1962 but never moved in to capture him, according to a retired chief of Mossad, the Israeli secret service. The former official, Isser Harel, said the hideouts were too well guarded. But others have suggested that Israel, stung by criticism over its abduction of Adolf Eichmann, was reluctant to undertake another one, even if it involved a man of Dr. Mengele's notoriety. Since investigators found last month, based on an analysis of bones from a grave, that Dr. Mengele died in Brazil in 1979, questions have also been raised about West Germany's diligence in tracking down Dr. Mengele, who now appears to have had several hairbreadth escapes. New Deeds Described And details have begun to emerge indicating that some of his World War II deeds were even more horrific than reported. He was wanted for the gassing and torture of 400,000 inmates of the Auschwitz death camp.

Directors of the First National Bank of Chicago are under pressure from Federal regulators to make major management changes at the bank because of its persistent loan losses, according to bankers in Chicago and Government sources. The Office of the Comptroller of the Currency, these sources said, has not specifically asked for the removal of Barry F. Sullivan as chairman. But it has been pointedly ''reminding some key directors about their responsibility for the management of the bank,'' one of them said. First Chicago denied the reports. ''It's nonsense, and there's no basis to it,'' said William W. Baldwin, its manager of press relations.

By cutting its oil prices late Wednesday, Mexico took on the reluctant role of an industry price leader, compelled to act as it lost markets to OPEC discounters, petroleum specialists said here today. The price cut by the largest foreign supplier of oil to the United States adds significantly to the downward momentum in worldwide oil prices, analysts said, and puts increased pressure on OPEC to take some decisive action when it meets on July 22. The stocks of most major oil companies fell in response to the news and the spot-market prices of crude oil from other parts of the world also posted declines. The Mexican cut of $1.24 a barrel, on average, was necessary to ''re-establish the competitiveness of Mexican petroleum in foreign markets,'' the Government said. One foreign industry specialist agreed. ''They had to do it,'' he said. ''OPEC was making a mockery out of Mexico's commitment to OPEC's leadership.''

The Economy Major retailers had disappointing sales in June because of unseasonably cool weather and sluggish demand. At Sears, the biggest chain, volume fell 1.5 percent from June 1984. [Page D1.] A Treasury official said attacks on the Reagan tax plan that assert it would be unfavorable to middle-income taxpayers were ''not sustainable.'' But modest changes may be needed, he added. [D13.] House and Senate budget negotiators may face a new impasse over domestic spending cuts, they said. Many Senate Republicans were critical of President Reagan for dropping the Senate's proposed freeze of a cost-of-living increase for Social Security. [A13.] Companies Directors of First National Bank of Chicago are under pressure from Federal regulators to make major management changes at the bank because of its persistent loan losses, according to bankers in Chicago and Government sources. [D1.] Levi Strauss said a leveraged buyout offer may be made by descendants of its founder at $50 a share, or a total of $1 billion. The news sent Levi Strauss's common stock up $8.50, to $45.50. [D1.] United Technologies earnings tumbled because of losses at its Mostek semiconductor division. Net income was down 67.6 percent in the second quarter, to $54.8 million. General Electric rose 1.9 percent, to $590 million, while Westinghouse climbed 12.3 percent, to $143.9 million. [D3.] Chemical New York's profits jumped 39.7 percent, to $107.3 million, while Marine Midland gained 8 percent, to $28.5 million, and Irving rose 19.4 percent, to $31.4 million.

The House passed a $12.6 billion foreign aid bill today that appears to reflect a growing determination on Capitol Hill to confront Communist and other leftist governments around the world. The legislation authorizes new aid for rebels battling the Marxist Governments in Cambodia and Afghanistan, and lifts a nine-year ban on American help to insurgent forces in Angola. Last month, the House reversed earlier votes and supported renewed aid to forces seeking to topple the leftist Government of Nicaragua. 'Don't Want to Look Weak' Vin Weber, a Minnesota Republican, summed up the mood by saying, ''Members of Congress don't want to look weak right now.'' Michael D. Barnes, a Maryland Democrat, added: ''It's sort of an angry mood around here. Who can we stick it to next?''

A Federal judge declared yesterday that it was unconstitutional for the Government to seize legal fees that criminal defendants paid to their lawyers in racketeering and narcotics cases. The decision, issued by Judge Pierre N. Leval in Federal District Court in Manhattan, quashed a subpoena that sought fee information from Ivan Fisher, a well-known defense lawyer, in a major narcotics case. The prosecutors, who said Mr. Fisher's fee was about $500,000 in the case, contended they could seize his fee as proceeds from narcotics trafficking if his client was convicted in a forthcoming trial. Lawyers Concerned Judge Leval said both the subpoena and the possible seizure of the fee would violate the defendant's right to counsel. The subpoena would compel the lawyer to give evidence against his client, the judge said, while the attempted seizure would cause the lawyer to drop the case for fear of losing the fee.