Almost immediately after Frank Capra finished his black-and-white epic "Lost Horizon" in 1937, the butchering of the movie began. Over the years, the film, which originally ran 132 minutes, was released in various truncated versions. And nature did its work, too, as the original nitrate negative disintegrated.

Now the film is available again in a carefully restored version that runs to full length, with a sound track playing behind production stills to recreate two or three scenes that have been lost forever.

Based on the James Hilton novel, "Lost Horizon" is the story of a British adventurer, Robert Conway (Ronald Colman). He's known for his international derring-do, but also for the pacifist, utopian visions he's written into a series of books. At the outset, he rescues some British nationals from the jaws of a local Chinese revolution, but the airplane he thinks is headed for Shanghai is shanghaied by a pilot who makes off for the Himalayas, where he crash-lands in a snowstorm.

Conway and his compatriots are rescued by Chang (H.B. Warner), an enigmatic, monkish fellow who leads them to Shangri-La, a valley of sunshine and contentment. Under the leadership of the High Lama, a former Belgian priest named Father Perot (Sam Jaffe), the people of Shangri-La never worry and never grow old. It turns out that Perot, intrigued by Conway's utopian notions, has summoned him to Shangri-La to become his successor.

Great directors are perhaps best understood by their failures, and such is the case with "Lost Horizon." Capra made his poetry not out of dreams, but out of dreams dashed, from the the John Doe clubs of "Meet John Doe" to the boys' town of "Mr. Smith Goes to Washington." A sincere sentimentalist, Capra was also remarkably clear-eyed about the way life tears down our Shangri-Las; if his heroes were wonderfully naive, their small-town virtues earned them big-city wounds, as cynical newspapermen, crooked politicians and corrupt moneymen took their potshots at them. So "Lost Horizon" is, in a way, only half a Capra movie. It's as if "It's a Wonderful Life" had been about Jimmy Stewart getting his chance to travel around the world, instead of being stuck in Bedford Falls.

"Lost Horizon" does, however, have its share of Capra touches, particularly in the way he uses the vigorously quirky rapport of his secondary characters -- Barnard (Thomas Mitchell), a self-made man, and Lovett (Edward Everett Horton), a finicky paleontologist -- to play off his central theme.

And the close-ups of Sam Jaffe's face, carefully modeled with the minimum of light, exemplify one of Capra's least mentioned gifts -- the unique feeling for human physiognomy that made him, without overstating it, a kind of American Eisenstein. Capra was a much more visually inventive director than he's given credit for, and "Lost Horizon" is beautifully photographed (by his longtime associate, cinematographer Joseph Walker), with many of its scenes playing in striking silhouette.

"Lost Horizon" was mounted on a much grander scale than anything Columbia Pictures had attempted till that time (it cost $3 million at a time when the studio's budget for the entire year was $4 million), and it is notable for the imaginative scope of its production design, its use of miniatures and "special effects" (the Himalayan sets were built in an abandoned icehouse, so the actors' breath would show), and its willingness, uncommon at the time, to shoot on location.

If, on a story level, it seems like a tired episode of "Star Trek," that only reveals another aspect of Capra's profound influence on a host of contemporary filmmakers. Chang is like Yoda, the Lama like E.T., and in "Lost Horizon's" sense of vastness and of another, better world, you see the work of Steven Spielberg and George Lucas, 40 years before its time.

Lost Horizon, at the MacArthur, is unrated but contains no offensive material