IT IS A LONG WAY from Phineas T. Barnum's American Museum, founded in 1841, with its jugglers, trained fleas and rope dancers to the Smithsonian Institution with its 14 museums and its panoply of no less than five major visual arts institutions. The story of the spectacular development of American museums in the course of a century makes for very lively reading. It is a story, as Karl E. Meyers tells it, of power, money and sometimes ethics, replete with basic contradictions and some remarkably fortuitous strokes of luck. It is certainly a timely story: We cannot afford to look the other way when museums, particularly art museums, have extended themselves beyond their natural capacities and have brought upon themselves unprecedented woes that threaten their future.

The maddening brouhaha surrounding the "Treasures of Tutankhamun" is the signal that it is time to inform ourselves. Meyer's book provides a good beginning. He clearly defines the basic problem when he refers to the American museum as a "hybrid." It is never fully state-supported and it is never fully independent of public funds (even when it is nominally a "private" institution such as the Museum of Modern Art). The American museum most often rests uneasily in the hands of private donors and trustees, but is no longer capable of raising its operating expenses which have, during the past few years, risen to double the rate of income. For many public galleries, writes Meyer, "the squeeze is as untimely as it is cruel; at the moment least propitious for these institutions, the bills are coming due for costly expansion programs undertaken in the exuberant '60s and early '70s. As a result, art museum boards, although ideologically they tend for the most part to be hostile to big government, have become supplicants for state and federal aid. In the process they have encountered anomalies of what is probably the most complicated system of cultural patronage ever devised -- the labyrinth of state arts councils and national endowments."

Since the new national support systems were modeled on private philanthropy, which has always favored subsidy of the more glamorous and visible functions of museums, "trustees have found themselves in the almost schizophrenic position of trying to reform a system that their own doctrines have helped shape." In their frantic scramble to find new means of sustaining such lowly installations as plumbing and heating, many museums have resorted to the appalling commercial exploitation we are still witnessing in the King Tut show, negotiated by the former director of the Metropolitan Museum, Thomas Hoving, with the Egyptian government for a $2.6 million cash guarantee. To meet the guarantee, the participating museums went in for unprecedented huckstering:

"Wherever the pharaoh's treasures went, there were local commercial tieins: Stores featured hieroglyphic watches, Egyptiac datebooks, and napery with a Nile theme. 'Official' replicas were sold under museum auspices; in Washington and Chicago alone, according to Newsweek , gross museum sales exceeded $2,000,000."

In measured and fair arguments Meyer points to the inherent dangers in such flagrant exploitation of museum functions. Aside from the dubious taste of show-business tactics, there is the problem of value itself: True works of art, as he says, serve as symbolic reminders that in fact there are things that even money cannot buy. The muddied issue of "elitism" is neatly addressed in this book, which again and again provides documented instances of the failure of so-called "populist" undertakings, which somehow always wind up in the Phineas T. Barnum tradition.

Meyer's image of the larger institutions is based on three years' research and careful monitoring of the most egregious disputes such as the famous "deaccessioning" case of the Metropolitan Museum. The board of trustees in that instance permitted its director, Thomas Hoving, to state publicly its delusion that the works of art in the museum were "owned" by the trustees. Since public funds are in fact utilized by the Metropolitan, and since no charitable organization may "own" corporate property, the trustees in this (and so many other cases) were reflecting a bygone era in which the very rich brooked no interference. The trustee system itself is called into question in this book, for it has never successfully reformed itself to include professionals and representatives of the public -- a reform that remains imminent and inevitable.

Meyer's review of the history of museums -- their shifting bases of patronage, the clashes between robberbaron patrons and government, the growing conflicts between underpaid professional employes and well-heeled trustees, the unsatisfactory burgeoning of a cultural bureaucracy as government steps in to salvage desperate museums, and scores of other problems -- makes this book a valuable source of questions. Most of us have been aware of the increasingly bizarre, and often vulgar behavior of the most staid institutions, but the hard questions have been sidestepped for years. It is now obvious that the survival of the museum as a repository of cultural value depends on thoughtful analysis and inventive approaches to economic problems. Meyer proposes some tentative meliorative measures and submits his alarming facts with the intention of provoking public scrutiny. The author's background as a journalist probably helped his work since museums and their boards are notoriously secretive. Meyer has brought much to light, and handled his data with expertise.