SOUTHAMPTON, Bermuda - The sands of Horseshoe Bay are as white as the beaches of childhood. The huge gray rocks littering the shore appear to have been put there by Zen masters on holiday. The brilliant sun shines on cobalt waters like on arc light in an iridescent sky.

Bermuda is unreal rugged beauty. At the same time, it's comfortable seaside civilization.

It's this combination of beauty and creature comforts that makes this oldest British colony a synonym for holiday. Americans who come here don't experience culture shock, just a nice culture tingle. Almost everything they expect at home is close at hand. The Bermudan dollar is pegged to its U.S. counterpart so the two are used interchangeably. Drug-stores carry American toiletries, and hotel lobbies have stateside newspapers, same-day delivery. The language, of course, is English. And it's hard to tell the tourists from the natives.

Still, there are enough differences to let visitors know they're not at home. Cars move on the left. Public transportation is good, inexpensive and dependable. The speed limit is 20 mph. And there are no neon lights and no sales tax.

Bermuda is so dependent on tourism that it's almost a giant theme park in the mid-Atlantic. Each year more than half a million Americans come here to enjoy themselves, and they leave behind the dollars that make Bermuda one of the richest little islands in the world.

But the trouble with running a theme park is that every season the competition gets tougher. The Carribean islands are trying to get more Americans to vacation there in the summer. Charter fares to Europe are almost as cheap - and sometimes cheaper - than air fare to Bermuda. Club Meds are popping up all over. And so on.

The pressure of competition is already causing some changes.

This year Holiday Inn at St. George resigned from the Bermuda Hotel Association to protest what innkeeper David Beswick called out-dated marketing techniques. These included the association's ban on cooperative advertising, prohibition of charter flights to Bermuda, and its policy of not allowing guests to pay with credit cards. The Holiday Inn began accepting American Express cards at once.

Meanwhile, the Bermuda government announced that it is looking into permitting charter flights from cities without scheduled flights to the island, and in March the association lifted its rule against cooperative advertising and is reportedly exploring the use of credit cards.

If Bermuda makes any major changes, they no doubt will be made slowly. Her love affair with North American visitors goes back a long way, and she knows that many who come here each year do so because they like things the way they are.

The affair began almost as a lark when, in the winter of 1883, Princess Louise, the daughter of Queen Victoria and the wife of the governor-general of Canada, got tired of cold winters and fled to Bermuda. Tennis had been introduced here six years earlier. The island was a natural golf course, complete with sand traps, just waiting for an architect. And so the Bermudans built a hotel and named it after their royal guest.

The Princess Hotel is still standing, just outside Hamilton. It has been expanded, and in the process some of the grounds and the tennis courts have been lost, but the entrance, gardens and some of the rooms are much like they were almost a century ago.

The princess - the real one, not the hotel - started a fashion, and soon it became the thing for society to spend the season here. Bermuda got another boost after World War I, from prohibition. Six steamship lines plied back and forth between the States and the colony, bringing thirsty Americans, and Pan Am added a direct flight from New York. But the real boom took place after World War II when modern commercial air travel came of age and a prospering American middle class set out to see the world.

Part of Bermuda's charm can be found in the relaxed but elegant hotel lobbies, the restaurant dining rooms with flowers on the tables, the carefully manicured gardens that are everywhere on the island. The 20th century with all its garish ways hasn't quite hit Bermuda.

But is has hit the people, and Bermuda is feeling the subdued rumble of social change. Race relations here are generally described as good. Blacks, who make up a majority of the population of 57,000, hold top jobs in government, and there is no overt discrimination. Economically, however, blacks as a group are disadvantaged.

Hard evidence of smoldering discontent erupted in the fall of 1977, when several blacks were arrested and tried for the murder of Bermuda's governor and an aide four years earlier. They were convicted, sentenced and hanged. Rioting broke out across the island, causing millions of dollars in damages, a curfew, and the loss of thousands of tourists, as frightened would-be vacationers changed their minds and stayed home. But it was an isolated incident, and by spring of 1978 things were back to normal.

A potentially serious disruption almost occurred recently when the 4,500-member hotel and restaurant workers union failed to reach agreement with the Bermuda Hotel Association and threatened a strike last April 10. The Bermuda government brought in former U.S. secretary of Labor and top mediator W.J. Usery to mediate the talks.

During the final week before the strike deadline, Usery conducted long sessions in the caucus rooms of the Sessions House in Hamilton, where the Bermuda House of Assembly and Supreme Court meet. On Sunday, two days before the deadline, with both sides far apart and refusing to move, and the island heading for the strike neither side wanted or could afford, Usery proposed his own compromise solution. That same afternoon, the Bermuda soccer team defeated U.S. team 1-0, to win a four-team tournament that also included Mexico and Canada, and earned the right to advance to the Pan Am games in July.

National pride peaked, and then some. The Royal Gazette bannered "Bermuda Are Top of the Tree!" Going into the Final session Sunday night to consider the compromise, the chief negotiator for the hotel association, a Baltimore attorney, turned to Usery.

"Well, Bill, I guess you heard we lost."

Usery, loud enough for both sides to hear, replied, "No, you lost. During these negotiations, I'm a Bermudan."

Then he talked with both parties about the importance of a settlement to the Bermuda economy. They caucused all night and announced at 8:30 in the morning that an agreement had been reached.

Bermuda has social problems at the individual level, too.

Victor E. Simms is 38, has been driving a taxi for more than 20 years, has a home, a wife, and two daughters, 10 and 12. He's a fifth-generation Bermudan - part Scot, part Irish, and part African.

"'Roots' wasn't too popular here," Simms says. "People start looking into their ancestry and they find everybody is related to everybody on the island."

Simms is beginning to think four decades on one island is enough. In his words, "Things just aren't the same any more. Bermudans are a happy people, but you don't see them smiling so much now. Before, everybody used to help everybody. Now it's not that way."

A short, stocky man with a mustache that looks like a thick dab of tar on his lip, Simms is concerned about - sound familiar? - crime, drugs, failure of the schools and the lack of opportunities for his family.

The schools he blames for not preparing Bermuda's youth for the skilled jobs that come to the island when businesses, such as Bacardi International, locate here to benefit from Bermuda's low taxes. Instead, outsiders are brought in to work and that, says Simms, disrupts the social fabric. He's thinking of getting away from it all and moving to Atlanta.

Bermuda's educators don't agree with Simms' attack on the schools. "It's simply not true," says Permanent Secretary for Education Mansfield Brock. He is proud of Bermuda College, which he helped establish in 1974, and the Ministry of Education's program of providing assistance grants of $3,000 a year to Bermudan students after they have completed one year in an accredited college or university.

Brock says high school and college curricula have been strengthened, especially in the areas of accounting and business administration, to help Bermudans of tomorrow prepare for the new opportunities that he sees coming here.

Bermuda has been a prosperous island through most of its history, and its inhabitants have learned to live well. More than a century elapsed from the time it was discovered in 1503 by a Spanish explorer, Juan de Bermudez, until it was settled in 1612 by the Virginia Company of England.

With little land and lots of sea, Bermudans turned to the ocean and made fortunes trading and even larger fortunes privateering. When slave-trading, piracy, smuggling and other forms of maritime free enterprise waned in the 19th century, Bermuda fell on comparatively tough times until the U.S. Civil War, when new fortunes were made trading with the Confederacy.

Things slipped again after Appomattox, and for a while a major source of income on the island was raising fresh vegetables out of season for New York. But with the arrival of Princess Louise, the building of hotels, golf courses, tennis courts, and the invention of tourism, things began picking up again, and it's been that way ever since.

So it shouldn't come as a surprise that Bermudans welcome visitors with genuine enthusiasm. But there's more to the warm welcome than just the knowledge that two of every three dollars spent here originate with the travel industry. Bermudans enjoy life, and they enjoy sharing it.

Someone once said that you can tell a nation by its eating habits. One thing a visitor to Bermuda notices right away is that there are no fast-food franchises, probably because the Bermudans know that life is too short to be spent eating fast food.

The islands really don't have a cuisine all their own, although they have a few dishes and do wonders with beans and rice in a concoction called Hoppin' John.Instead, they've borrowed largely from North America, but also from the continent and Great Britain, and have made the most of the abundant seafood surrounding them.

And they do it with care, and serve it well. Even in a short-order drugstore in downtown Hamilton, the food comes piping hot and tasty. In the better restaurants, the food is carefully prepared for appearance as well as taste, and invariably is graciously served.

But if you want to see the Bermudans - or tourists - enjoy themselves, go to Sunday brunch. At the Inverurie Hotel, for example, after noon on the day of rest, gourmandizing is raised almost to a high art form.

Along a wall of a massive dining room looking out over Hamilton Harbor, a cauldron of hot soup stands guard at one end of a long buffet table. At the other end, pastries of all kinds, supported by ranks of chocolate mousses, are deployed in formation. In between are breads, creamy New Zealand butter, cold cuts, salads, and meat and vegetable dishes.

At another end of the room, a chef spreads barbecue sauce on pieces of chicken and chunks of steak sizzling over charcoal briquets. Costumed waitresses and waiters move from silvered, linened, flowered tables serving complimentary punch, wine and coffee. It takes at least an hour and a half to do minimum justice to all this temptation, and the charge is just $7 per person, plus tip. You can get to the Inverurie from Hamilton in just a few minutes by ferry.

Bermuda consists of the mountain tops of an undersea range poking up in the middle of the Gulf Stream 600 miles off the coast of North America. The seven main islands that form most of Bermuda are shaped like a fishhook with the eye to the northeast and the hook to the southwest. In the hook of the fishhook, the ferries form part of Bermuda's excellent public transportation system.

On shore, small (by U.S. standards) pink and blue diesel buses chug the length of the island, usually at half-hour intervals, and even more often during what passes for rush hour. Good public transportation is important, because cars are strictly limited here. In fact, they were not permitted until after World War II. Rental cars don't exist.

What most visitors do, and adapt to quickly, is rent mopeds (motorized bikes). They rent for about $8 for one day, with cheaper rates for longer periods. Since the speed limit for all motor vehicles is only 20 mph, and the island swarms with mopeds, the practice isn't as dangerous as it seems (though accidents occur regularly due to the left-hand driving rule), and for most visitors, it's part of the Bermuda experience - as well as the easiest and cheapest way to see the island.

Visiting Bermuda is not difficult, and it's not inexpensive, either, but you get your money's worth. It's quality. And it's almost impossible not to have a good time. Accommodations can range from modest, but clean, housekeeping cottages from less than $20 per day per person, to large hotel rooms that include meals and cost well over $100. It's not important to be on the ocean. Bermuda has excellent public beaches and they are easy to reach. Some have changing facilities.

Shopping in Bermuda not only affords some excellent buys, especially in British woolens, but it's also usually pleasant.

Fodor's "Bermuda 1979," by Antoinette DeLand is an excellent guide, and well worth $5.95. Travel accommodations should be made in advance through an agent. And bring a camera.

Such fun! And such water! In all your lift, you've never seen such water! CAPTION: Pictures land 2, Each year more than half a million Americans go to Bermuda to enjoy themselves. Left photo by John N. Rogers for The Washington Post; right, by the Bermuda News Bureau; Map, no caption, By Richard Furno - The Washington Post