What more appropriate place to honor the nation's tale tellers than under the auspicious guise of the Folger Shakespeare Library?

Last night, six nominees for the annual PEN/Faulkner award--the only major literary award that is administered, funded and judged by other writers--were lauded for their contributions to the world of fiction. It was also the award's debut at the library, where it will be given out from now on.

PEN/Faulkner founder and novelist Mary Lee Settle said she felt it was highly appropriate for the $5,000 award to move to Washington from Charlottesville, where it's been presented since its inception two years ago.

"Washington is the place for a national award to be," Settle said. "What's more, it's at the Folger. What's more than that, we're on Capitol Hill."

The PEN/Faulkner award presentation tonight follows a day-long writer's conference at the Folger organized by the D.C. Commission on the Arts and Humanities. This first annual writer's conference is named for Larry Neal, who died in 1981 from a heart attack and had served as the first executive director of the commission.

Commission director Mildred Bautista also expressed enthusiasm at bringing the PEN/Faulkner awards to Washington, and said she saw the gathering as more than just a meeting of the minds.

"Relocating the PEN/Faulkner awards means two things for the city," she said. "It's going to bring great direction, prestige and visibility to D.C., and it's an opportunity to assemble together our local writers from the community."

In his remarks, Mayor Marion Barry proclaimed this weekend "Washington Writer's Weekend," and said he wanted "everything to be positive" for the writers.

"I think it's fabulous the PEN/Faulkner awards are around here. I love it when things like this happen to the city," he said.

O.B. Hardison, director of the Folger, also expressed high hopes. "This could give a lot more visibility to us than other cities. It will draw more attention to the writers in D.C. as well as to writers as a group," he said. "God willing, it the PEN/Faulkner will become the national literary award."

Writer William S. Wilson, whose novel "Birthplace" is among the six books up for the award, said he feels that most book critics today "as generous as they are, tend to have a commercial cast" to the various grants and honors they award.

"The PEN/Faulkner award hasn't been influenced by that," Wilson said. "It's the most meaningful award because its funded by writers and its judges are writers."

The six nominees for the award are: Maureen Howard, "Grace Abounding"; Bobbie Ann Mason, "Shiloh and Other Stores"; Toby Olson, "Seaview"; George Steiner, "The Portage to San Cristobal of A.H."; Anne Tyler, "Dinner at the Homesick Restaurant," and Wilson's "Birthplace."