A perfect summer day and a schedule full of festivals turned the city into a playground yesterday.

While several thousand Washingtonians munched and strolled their way through the exhibits at the Smithsonian Institution's annual Festival of American Folkways on the Mall, a score of hardier souls showed their mettle at the fifth annual Queen's Cup Regatta on the Potomac River.

The Mall festival provided a painless education in America's surviving arts and crafts, but the canoe race on the Potomac was the perfect occasion for those who simply wanted to relax and act silly for a day.

At the Thompson Boathouse, on the Georgetown section of the Potomac, several dozen sunbathers napped, chatted, downed wine and beer and waited for the beginning of the regatta, which was sponsored by the National Park Service and the English-Speaking Union, an organization that promotes good will between the British Commonwealth countries and the United States.

Strauss waltzes played over the loudspeakers while the racing categories were read off by organizer Frederic Schwartz Jr., an attorney in his more serious moments. There were categories for the Fiscal Free Style (limited to employees of financial and economic institutions); the Media Melee (for electronic and print media), and the Free for All.

Categories were extremely flexible. Jackson Brodsky, a lawyer from Bethesda, wondered if there was a category for his kayak, and Schwartz immediately offered him the Solicitor's Stroke.

"There is a serious purpose to this," said Schwartz, uncharacteristically. "This is an attempt to highlight the Potomac River as an available recreational resource not only for serious sportsmen but for people who want to have fun."

Michael Hackett, of Annandale, and Tim Gilroy, of Fairfax, arrived 15 minutes before the scheduled race time to practice their canoeing. Although Gilroy fell directly into the water on the team's first attempt to sit down in their rented canoe, they subsequently did well enough to place first in the Free for All category.

The strains of "Brittania Rules the Waves" finally signaled the beginning of the first race to canoeists and sleepy sunbathers before 3 p.m. With deceptive ease five small craft--including Brodsky's kayak--set off in the direction of Memorial Bridge. Some spectators with a sense of tradition, dressed in pastels and wearing straw boaters, followed the race with binoculars.

A short time later one solitary figure in a kayak paddled back to the finish line. Brodsky of Bethesda, 69 years old, outdistanced the competition through a combination of muscle and wile.

"I took the wind downstream, and then I got behind the Theodore Roosevelt Island where the water is flat and stayed on that," he said. "My wife will never believe this. When I told her I was thinking of entering the race this morning she laughed. 'You old goat,' she said. 'You're too old for this sort of thing.' "

While the other canoeists struggled back against the current, Schwartz congratulated Brodsky. "We know his time was tremendously good," he said. "Unfortunately, we forgot to clock it."

The festival on the Mall was as organized as the regatta was casual. This year's themes were France, New Jersey and "the folklife of flight," and that seemed as good an excuse as any to present the best of surviving folk traditions from all over the United States.

The syncopated clatter of a working silk loom attracted dozens of tourists and native Washingtonians. One woman watched raptly as the machine added line after line of pattern to a bolt of black and white checked silk. "It's just so fascinating to watch the thing grow!" she said to her husband.

Across the mall Jesus Cepeda of Puerto Rico interrupted his demonstration of tambourine making to join three friends in a traditional plena--a lilting Puerto Rican rhythm that uses small percussion instruments and four-part vocal harmony. Near him, Almeda Riddle, an 85-year old singer from the Ozarks, held the hushed attention of more than 100 people with her ancient ballads sung a capella.

Ed Jonna, a food retailer from Detroit, sat under a tree with his family consuming large quantities of barbecued ribs Atlanta-style. "The first thing we saw was the watermelon slices," he said. "We thought we had to have some of those. Then we saw the rest of the fair. We certainly like it better than the modern carnivals with rides. This is tradition."