October 4, 1985

Schools Chancellor Nathan Quinones said yesterday that three children had been removed from classes by community school district superintendents this term because of suspicions that boyfriends of the students' mothers had AIDS. The students themselves, he said, had not been reported as having acquired immune deficiency syndrome. He said that in one of the cases, he threatened yesterday to exercise his authority to supersede the district school board unless district officials agreed to permit the 9-year old child to return to school. At 6 P.M., the deadline for the district officials to respond, Mr. Quinones announced he had just been informed that they had agreed to permit the student to return.

International Mikhail S. Gorbachev laid out a formal arms proposal to the United States and offered to make a ''separate agreement'' with France and Britain to halt what he called the ''infernal train'' of the arms race. [Page A1, Column 6.] President Reagan welcomed the change in the Soviet position on arms control outlined in Mikhail S. Gorbachev's speech in Paris. The President called the alterations substantial and said he had no objection to separate negotiations between Moscow and Britain and France. [A1:5.]

Until last month, Canada's highly concentrated banking industry had gone 62 years without a bank failure. But since Sept. 1, two of the country's 14 banks have collapsed, leaving behind a potential Government loss of more than $3 billion (Canadian) and the likelihood of major regulatory changes. And rumors were circulating today in Canada's financial community that a third bank, the Mercantile Bank of Montreal, is in difficulty and could be sold or forced to liquidate in the next week. The problems have been linked to bad loans in the energy field, real estate and other sectors, echoing similar difficulties at banks in Texas, Oklahoma and California.

The largest law firm in Washington, D.C., Covington & Burling, dropped South African Airways as a client last week, only days after a boycott of the firm by law students at Harvard, Yale, New York University and a number of other schools cut into its efforts to recruit new associates. The firm confirmed Wednesday night that ''our relationship with the airline was terminated'' last week, but it gave no reason for the action. The firm denied, however, that the decision to cease representing the state-owned airline, whose litigation and regulatory cases it had handled for 10 to 15 years, had been linked to the boycott. ''The subject is one that we have considered for a long time within our firm,'' said Mark A. Weiss, a Covington & Burling partner and member of its management committee. ''I can tell you that the timing was coincidental.'' Airline officials did not return telephone calls yesterday.

Defense Secretary Caspar W. Weinberger charged today that the Soviet Union had abandoned the idea of ''mutual assured destruction'' that had long been the basis of nuclear deterrence, and had raced ahead with its own antimissile defense program, even as it denounced President Reagan for doing the same. In a speech to the Philadelphia World Affairs Council, a text of which was made public in Washington, Mr. Weinberger said the United States had rejected dependence on arms-control treaties and the threat of mutual destruction as ''the ways of the 60's'' only after the Soviet Union had abandoned them long ago in practice. ''We have learned that the dogma of agreed mutual vulnerability, over the long term, is not a safe guarantee against nuclear war, particularly when the Soviets do not accept it,'' he said. Space-Defense Strategy He defended the United States quest for a way to defend against attacking missiles as the only strategy that can protect America and its allies from nuclear war ''regardless of Soviet activities.''