The Federal Reserve Board gave New York artist Barton Benes "several million" dollars for a paper collage Thursday. It could have been the highest price ever paid for an American work of art--if the money hadn't been shredded.

But payment in shredded bills--from which Benes fashioned much of the art that went on view last night at Fendrick Gallery--was just what he wanted.

"It's harder to get than regular money," he said, referring to the inacessibility of the $100 million in worn-out bills devoured daily by Federal Reserve shredding machines.

"It was a barter deal," he explained after a ceremony at the Fed attended by National Gallery Director J. Carter Brown, art philanthropist David Lloyd Kreeger and other members of the Fed's Fine Arts Advisory Panel.

Benes' three-dimensional "Butterfly" collage, fashioned from old Japanese currency, hung nearby as Fed staffer David Frost presented Benes a bow-bedecked cardboard carton filled with his favored spaghetti-like shredded bills.

"I love it, it's perfect," Benes said, running his fingers through the stuff. "It's also cheaper than art supplies. Every bank shreds their money differently, but this is the best."

Benes, who claims he can tell what country money comes from by its smell, has gone international in his new Fendrick show, thanks to friends who send him money from all over the world. The exhibit begins with a giant, boxed collage called "Smorgasbord," made from a dozen sculptural plates of food fashioned from the appropriate currency--a bowl of spaghetti made from Italian lire, Swedish meatballs covered with kronor, escargots made from French francs. They are made with an especially delicate, sensitive touch and a fine finish that is sometimes missing in his work.

Benes had a $3,000 grant from the Ariana Foundation to buy money and tear it up for another large collage, "Money," in which various symbolic items have been wrapped with relevant bills: a toy tank with money from the Soviet Union, barbed wire wrapped in East German bills, an Indian rupee that looks like a bed of nails. "Midas" is the subject of a sculpture made from shredded dollars and several funny collages touched with glitter and diamond dust.

Other works, notably the large, billowing "Flying Carpet"--which looks like an oriental rug--depend less upon wit than decorative instinct, the patternings here made from Japanese, Phillipine and Central Bank of China notes. There are also several ethnographic-looking items such as pre-Columbian fetish dolls, feather necklaces and crowns, also made of money, but inspired by the primitive art collection the artist has accumulated with his unmutilated money.

If Benes is always clever, he is not always profound. But his elegant laurel wreath, "Crown", made from cut-up dollar bills backed with gold foil, is a classic comment on what modern society deems most worthy--notably, money.

In his earlier work, Benes often used words taken from the rambling, stream-of-consciousness letters of his Aunt Evelyn, who became enraged when she discovered what was going on. A major piece in this show, "Gossip Column," is covered with rubber-stamped words from an angry letter Aunt Evelyn wrote to Benes' New York dealer. It is a moving, monumental and altogether scandalous piece.

Benes, who says he has tired of working with money, has now begun to work more with collections of things. An example--"The Snip Collection" on view here--includes snips of original works of art by famous people, including tiny fragments of Picasso and Warhol prints, a bit of Christo's running fence and what the artist claims is the last lock of hair from the head of the now-bald Sol Lewitt.

A showman and wit of unique--if sometimes odd--sensibilities, Benes has also moved into new areas of the taboo--such as making vases from cremation ashes--but Fendrick has spared us that particular adventure. This show will continue at 3059 M St. NW through May 3. Hours are 9:30 to 5:30, Mondays through Saturdays. Annette Polan at Foundry

Annette Polan's "Portraits and Self-Portraits" at Foundry Gallery is disturbing in two ways. Working from photographs, she draws and paints (in pale washes) torsos of children holding children, a mother holding a child--all truncated images of flesh upon flesh. There are no faces, mostly backs. The skin on the babies is heavily dimpled and sags, like the skin of very old people.

What Polan seems to be after here is an evocation of generational layers and similarities, and to this end she groups these images with portraits of older people, presumably grandparents. In the best of these groups--"A History and Two Events"--a sense of unspecific, multigenerational drama does come through. But elsewhere, the use of aged flesh to suggest ambiguous comparisons between youth and old age does not work because it is much too hard on the side of age, and is merely upsetting. There needs to be far more tension to succeed. The show continues at 641 Indiana Ave. NW through April 30. Hours are Tuesdays through Saturdays, 11 to 5.