''I really can't read music,'' Mr. Berlin once said. ''Oh, I can pick out the melody of a song with one finger, but I can't read the harmony. I feel like an awful dope that I know so little about the mechanics of my trade.'' To overcome his inability to play in any key but F sharp, he used a specially built piano that had a hand clutch to change keys. He called it his ''Buick'' and for years he took it with him on trips to Europe. It is now in the Smithsonian Institution. Son of a Cantor

The man who came to be known as Irving Berlin was named Israel Baline when he was born near the Siberian border in the Russian village of Tyumen on May 11, 1888, one of eight children of Moses and Leah Lipkin Baline. His father was a cantor. A pogrom in 1893 persuaded Moses Baline to bring his family to New York, and they settled on Cherry Street on the Lower East Side. Israel was 8 years old when his father died, and the boy took to the streets to help support his family. This marked the end of his formal schooling, which totaled less than two years.

Izzy, as he came to be called, became a newspaper boy, hawking The Evening Journal. On his first day on the job, according to Woollcott, the boy stopped to look at a ship about to put out for China. So entranced was he that he failed to notice a swinging crane, and he was knocked into the river. When he was fished out, after going down for the third time, he was still holding in his clenched fist the five pennies that constituted his first day's receipts, his contribution to the family budget.

Young Izzy found his first steady job on the Bowery, looking after Blind Sol, a singing beggar. He led him through the saloons, looked after his receipts and sang some sentimental ballads himself in his childish treble. His ambition was to earn enough money to buy a rocking chair for his mother. After-Hours Tunesmith

He was soon on his own, singing for tips at bars off the Bowery, plugging songs at Tony Pastor's Music Hall in Union Square and finally, in 1906 when he was 18, working as a singing waiter at the Pelham Cafe in Chinatown. When the bar closed for the night, young Berlin would sit at a piano in the back and pick out tunes.

Within a year, he published his first song, ''Marie From Sunny Italy'' (1907). He wrote the lyrics; the music was composed by Nick Nicholson, a friend who also worked at the Pelham Cafe. Because of a printer's error, the name of the lyricist on the cover of the sheet music appeared as ''I. Berlin.'' He kept the name. In the early days he was known as ''a man of few words,'' so meager was his grasp of the language. But he made his shortcoming a virtue, writing lyrics in the American vernacular that were uncomplicated, simple and direct: ''I'll be loving you always . . . Not for just an hour/Not for just a day/Not for just a year/But always,'' and ''How much do I love you?/I'll tell you no lie/How deep is the ocean?/How high is the sky?'' and ''You're not sick, you're just in love.''

''My ambition is to reach the heart of the average American,'' Mr. Berlin once said, ''Not the highbrow nor the lowbrow but that vast intermediate crew which is the real soul of the country. The highbrow is likely to be superficial, overtrained, supersensitive. The lowbrow is warped, subnormal. My public is the real people.'' Even Sorrow Was Inspiration