July 12, 1985

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.