"Irises" by Vincent van Gogh, the most expensive picture ever sold at auction, has become a sort of ghost.

The painting was last seen at Sotheby's, New York, on Nov. 11, 1987 -- a date that sends chills through America's museums. It sold that snowy evening for $53.9 million, and has not been heard of since. Its owner is anonymous, its whereabouts a mystery. But it haunts the art world still.

The echoes of that gavel blow have forever changed the business of publicly displaying the most commercially attractive works of 19th-century French art.

The vast majority of van Goghs, already in museums, will never reach the salesroom. But thanks to that one auction, vast ethereal fortunes now envelop every one. Are the best of them now worth $50 million just because two bidders chose to duel with one another that evening in New York? In ascribing values to their pictures, curators, collectors and art museum trustees have to figure yes.

Insurance premiums have soared. In the shadow of that sale, gifts to great museums have slowed to a trickle. Costs for couriers and for air fares, specially made cases and security precautions also have increased -- and not only for van Goghs.

Thirty-million-dollar prices for Gauguins are now considered likely. Fine paintings by Degas may soon fetch $20 million. The specter of such sales stalks the 300-object Degas retrospective that will go on view next month at the new National Gallery of Canada and next fall in Manhattan at the Metropolitan Museum of Art. It torments "The Art of Paul Gauguin," the 240-object touring show now on exhibition at the National Gallery of Art. And it endangers retrospectives we may never see.

That auction in New York has, by implication, added countless millions to insurance valuations. What once was unimaginable -- the era of the billion-dollar show -- is a fantasy no longer. It is already here.

It would take but 20 "Irises" for a billion-dollar show. In early 1990, 130 of his canvases will be assembled by the Van Gogh Museum, Amsterdam, for a retrospective marking the centenary of his death. Were such a show to travel, borrowing museums would probably be forced to pay multimillion-dollar bills for insurance costs alone.

Van Gogh's market has been tested. On March 30, 1987, at Christie's London salesroom, his "Sunflowers" was sold (to a Japanese insurance firm) for $39.9 million. A few months later, also at Christie's, his "The Bridge at Trinquetaille" brought $20.2 million. Last month, when thieves in Amsterdam smashed a window of the Municipal Museum and escaped with three pictures -- a Johan Jongkind landscape, a still life by Ce'zanne and van Gogh's "Carnations," none of them insured (and all soon recovered) -- the museum's director said the value of the loss was $53 million. "There is a van Gogh involved," he explained.

What, then, is the value of the finest paintings of his peers?

Multimillion-dollar impressionist and postimpressionist sales, unthought of 40 years ago, are commonplace today. "Irises" was sold in 1947 for $84,000. Now even modest objects carry seven-figure price tags. On May 10 at Sotheby's, New York, a Degas bronze brought $10.12 million, a Ce'zanne went for $9.24 million, and one of Renoir's nursing mothers fetched $8.8 million. The next day, at Christie's, a Mary Cassatt pastel brought $4.51 million, a Giacometti sculpture fetched $3.85 million, and an unexceptional van Gogh went for $13.75 million. Those two auctions fetched an aggregate of $157,577,500. That means the average price for the 110 objects sold was something in excess of $1.4 million each.

"There's been a sea change in the market," says scholar Henry Geldzahler.

"We have moved into a whole new set of prices," says Christopher Burge, the president of Christie's in America. "A $1 million sale once was thought scandalous and shocking -- then it was $2 million, then $5 million, then $40 million. The $2 million Renoir has become a $6 million picture. The $6 million Renoir is now worth $20 million, and the most important of his paintings would go for a lot more."

Prices so colossal, founded as they are on sanctimonious yearnings and salesroom machismo, cannot be rationally explained. Works of art are worth -- and "worth" here is an airy word -- just as much as buyers can be induced to pay for them. It is surely understandable that such multimillion-dollar sales are widely thought obscene.

Some say they do not matter, that if hungering collectors wish to waste huge fortunes on colored goo on canvas, why, let them go ahead. But they matter to museums. Major insitutions, the Metropolitan, for instance, or the National Gallery of Art, have been priced out of the market. J. Carter Brown, the National Gallery's director, points out that his museum worked for years to raise its $56 million Patrons' Permanent Fund, whose interest is reserved for major acquisitions. Had the gallery bought "Irises," it would have wiped out the whole fund.

"There is another factor, more insidious," says Philippe de Montebello, director of the Metropolitan Museum of Art. "I call it the inhibiting factor. Eleven years ago, when I took this job, I could go to our acquisitions committee and say, 'This splendid picture is coming up at auction; it is estimated at $500,000 to $600,000; if we're willing to reach for $700,000, it will certainly be ours.' And they'd tell me, go ahead. Now, when I say it could be $1 million, or $3 million, or $10 million, they look at me blankly. We do not even try."

On May 10, in Manhattan, Sotheby's sold two paintings by Henri Matisse. Both came from the collection of the Museum of Modern Art. "Lemons Against a Fleur-de-Lis Background" went for $5.72 million (to Joe Allbritton, the chairman of Riggs Bank). "The Pink Blouse," a canvas shown in Washington last year in the "Matisse in Nice" exhibit, fetched $3.08 million. They were sold to raise the purchase funds for "Large Seated Nude," a sculpture by Matisse that the museum bought last year.

"It's almost as if the only thing that can buy art is art," said Museum of Modern Art Curator John Elderfield.

Gifts to art museums also have been dramatically affected. Soaring prices -- combined with the requirements of the sweeping Tax Reform Act of 1986 -- have put them in new jeopardy. Tax deductions springing from donations to museums are no longer based on appreciated value, but rather on how much the object cost the donor. "The new tax law," says de Montebello, "has been extremely hurtful. So far this fiscal year, the Metropolitan has received zero Old Master paintings. Collectors have been telling me they can't afford to give."

Even borrowing great paintings for temporary shows may soon be beyond museums' means.

Mighty retrospectives -- MOMA's vast Picasso show, Manet at the Met, Renoir at the Boston Museum of Fine Arts, Gauguin at the National Gallery -- are enormously expensive. They are also irreplaceable. Certain major painters, colorists especially, can be fully understood only in exhibits that survey whole careers. "Chapter" exhibitions are likely to be cheaper, but even such restricted shows -- "Late Ce'zanne" at the Modern, "Henri Matisse: The Paper Cut-Outs" and "Matisse in Nice" at the National Gallery, or "Van Gogh in Arles" and "Van Gogh in Saint-Re'my and Auvers" at the Metropolitan -- now are under threat.

The Metropolitan's two van Gogh shows were mounted just in time. "Irises," which had a whole wall to itself in "Van Gogh in Saint-Re'my and Auvers," was sold within 10 weeks of that exhibition's closing. "I could not mount those shows today," says de Montebello. " 'Van Gogh in Arles,' with twice as many paintings, had half of the supplemental insurance costs of the second, smaller show."

"Irises" was also seen in 1984 in "A Day in the Country," at the Los Angeles County Museum of Art. "We were lucky," says Earl A. Powell III, the museum's director. "We got in under the wire. That exhibition would be virtually impossible to organize today." Alan Shestack, director of the Boston Museum of Fine Arts, is similarly fatalistic. He doubts that his museum would be able to afford its Renoir show again.

The Mystique of the Artist

"As far as the market is concerned," says Christopher Burge of Christie's, "van Gogh and Gauguin are on a level by themselves.

The easily accessible beauty of their paintings is only partially responsible. Equally important are the ripe romantic legends -- "Lust for Life," "The Moon and Sixpence" -- that swirl about their lives. The sunflowers of Arles, the maidens of Tahiti, the mutilated ear, the painters' poverty and pains, their miserable deaths and the Yellow House they shared -- no two 19th-century artists are more familiar to the public, or more attractive to collectors, than those sometime friends, Gauguin and van Gogh.

But while van Gogh's auction prices have set new market standards, Gauguin's have not soared.

At least not yet.

The auction record for Gauguin -- a relatively piddling $4.44 million -- was established last November at Christie's salesroom in London. But that painting, "Les Trois Huttes," was no true measure of demand. It portrayed no Breton peasants or luscious South Seas nudes. A more characteristic Gauguin already has sold privately for more than twice as much -- the figure quoted is $10 million. And even that impressive price is now considered low.

"There are plenty of people -- I myself know several -- who have made offers for Gauguins in excess of $30 million," says David Nash, Sotheby's impressionist specialist. "The only reason that such a transaction has not yet taken place is that so few pictures are available."

But few does not mean none.

At least a dozen grand Gauguins in the National Gallery's retrospective are still in private hands. "Breton Peasant With Pigs," former ambassador Walter H. Annenberg's magisterial "The Siesta" (perhaps the most salable picture in the exhibition), "Pape Moe (Mysterious Water)," "Nafea faaipoipo (When Will You Marry?)" and the superb "Otahi (Alone)" have yet to reach museums. Other "private collection" paintings here -- the "Portrait of Meyer de Haan," the "Self-Portrait With Yellow Christ," the "Self-Portrait With Palette" and the grand and sexy painting of Annah la Javanaise, seated naked in her bright blue chair, her orange monkey at her side -- might easily be sold.

"I would think that the value of a great Gauguin is now in the $25 million to $35 million range," says New York dealer William Beadleston. "I know of one privately owned Gauguin that was available -- before 'Irises' -- for $5 million or $6 million. I'm told the owner recently turned down $32 million. That was the best no-sale in a long time."

"A price of between $30 million and $40 million is not at all unlikely for a major Tahitian picture," says Burge of Christie's. "No auctions have been scheduled, but such a private sale could take place at any time."

"That is the terror," acknowledges John Wilmerding, the National Gallery's deputy director.

The Gauguin exhibition will visit three museums. It will be here through July, then go to the Art Institute of Chicago, and after that to Paris, to the Grand Palais, where it will remain on view through April 29, 1989.

Imagine what would happen should a $30 million sale become public knowledge halfway through its run.

Would its 50 finest pictures instantly be worth, say, $30 million each?

Insurance bills submitted to the three museums for the exhibition's tour already total $600,000. Would they triple, too?

Would the exhibition's many lenders, most of them museums, demand the renegotiation of their loan agreements? Would they pull objects from the show?

"It's scary, isn't it?" asks Dallas' Richard Brettell, who, as a curator at Chicago, helped organize the Gauguin retrospective. "It is possible that by the time it gets to France the French will not be able to afford the show that they've helped organize."

The Dance Around Degas

Last month, one of Degas' bronzes, "The Little Fourteen-Year-Old Dancer," set an auction record for a piece of sculpture when it sold at Sotheby's, New York, for $10.12 million. If you think that price impressive, consider what it bought.

Degas never worked in bronze. He never saw that metal dancer. She was cast after his death on the instructions of his heirs. The original, in wax, was purchased by Paul Mellon, and is now in the National Gallery. The bronze sold in Manhattan might be called a reproduction. It is certainly a multiple. The Paris foundry produced more than 20 other casts.

"What are there, 28 in all?" asks the Metropolitan's de Montebello. "Some nine are still in private hands. Does that mean 'The Little Dancer' is now a $280 million work of art?"

Other Degas prices, for his oils and pastels, have also spiraled upward. Consider, for example, his "Laundresses Carrying Linen in Town," seen in Washington two years ago in "The New Painting," the impressionist exhibition at the National Gallery of Art. The picture, although very beautiful, was quickly done, on paper, and is only 18 inches high. "It is not," says Burge, "the most commercial picture."

It was for sale -- for $1.5 million -- when "The New Painting" opened. One man who tried to buy it is the National Gallery's Charles F. Moffett, who was working for the Fine Arts Museums of San Francisco when he organized the show. That California institution is not particularly rich, but Moffett did his best. He talked to his committees, he importuned trustees. He succeeded, but too late. By the time he'd raised the money in early 1986, the picture's English owners had withdrawn it from sale. Instead an auction was arranged. It was sold at Christie's, London, on March 28, 1988, for $7.35 million.

Another Degas of laundresses, this one a large oil, was sold, also by Christie's, London, on Nov. 30, 1987, for $13.7 million. Burge calls it "the first impressionist painting to comfortably break the $10 million barrier."

David Nash of Sotheby's says that "Degas' major pastels, and his gouaches, too, are still relatively inexpensive. If the right one came to auction, it might bring $20 million."

The Degas retrospective (now being shipped from Paris to the new National Gallery of Canada in Ottawa) will open Oct. 11 at the Metropolitan Museum. In its New York version, the exhibition will include more than 300 works in various media. More than 200 of its objects will be oils, gouaches and pastels. With insurance bills so high, corporate donations become increasingly essential. A $1.5 million grant from United Technologies will help support the Degas show.

The Insurance Bind

"There is a Catch-22 involved in such retrospectives," says Huntington Block, the Washington insurance broker whose K Street firm has often served the National Gallery of Art. "If you have a great Gauguin exhibition, Gauguin's prices start to rise just because you have a great Gauguin exhibition."

Major loan exhibits brought here from abroad are nowadays protected by two kinds of insurance. The first is commercial insurance of the sort that Block provides. The second, granted without cost by the federal government, is an indemnity guaranteed by "the full faith and credit" of the United States.

The Arts and Artifacts Indemnity Program offers what insurers call "first-dollar" insurance. When its limits have been reached, commercial policies cut in.

Carter Brown has called the program "absolutely crucial." Established by Congress in 1975, it has so far saved museums insurance premiums totaling $30 million. And at a surprisingly small cost. Only one claim has been filed. Two pictures, by Tel Aviv painter Rueven Rubin, disappeared in Israel, in transit, in 1982. The U.S. government paid their owners $100,000.

"Applicants," writes Alice M. Whelihan, the National Endowment for the Arts' indemnity administrator, "must provide complete packing and shipping information for every object to be indemnified from 'wall to wall' {meaning literally from the lenders' walls, through the entire tour, back to the lenders' walls} ... Applicants must report the number and placement of guards, types of electronic surveillance, fire protection measures, the ranges and means of controlling temperature and humidity in the galleries, and the number of foot-candles of light to which light-sensitive art will be exposed."

The program is not open-ended. It has deductibles (ranging from $15,000 to $50,000, depending on the total value of the show) and limits. One limit -- raised last December from $650 million to $1.2 billion -- puts a ceiling on the indemnities available at any single time for all covered shows. There also is a limit -- of $125 million -- on the indemnities provided any single exhibition. A third restriction, sometimes waived, places a maximum value of $12.5 million on "objects transported in a single conveyance."

For the most expensive objects, that means one painting per plane.

"Curatorial accompaniment" frequently is required. "When I was at Yale," says the Boston Museum's director, Alan Shestack, "I often accompanied works of art to Paris. The typical trip took three to five days. The courier would supervise the picture's packing, take it to the plane, watch over it in transit, see to its uncrating and its installation, and then draft a condition report. Then he would fly home. When the exhibition ended, the whole process would begin again."

"As values increase," says de Montebello, "the number of shipments multiplies. You have to pay per-diems -- couriers have to eat. You have to pay hotel bills -- couriers have to sleep. You have to pay their air fares. Everything escalates. For our Fragonard exhibition, we had 32 couriers staying in New York."

Just crating major pictures has become prohibitively expensive. When the Museum of Modern Art first considered lending its most irreplaceable Picasso, "Les Desmoiselles d'Avignon," to 1988 exhibits in Paris and Barcelona, the curators responsible insisted it be shipped in an indestructible container -- until they got the bids. The crash-proof crate they'd specified -- reinforced with steel, invulnerable to shocks, impervious to moisture yet capable of floating -- would have cost the Modern $250,000. A stout but less expensive crate was eventually designed.

Even granted such precautions, and wall-to-wall insurance, and curatorial couriers, and federal indemnities, increasing numbers of private collectors are refusing to participate in museum exhibitions. "They are worried about damage, they are worried about vandalism, they are worried about being without their pictures," says David Nash of Sotheby's. "An awful lot of people just don't want to lend."

And prices keep on rising. "There are Picassos out there which might well bring between $40 million and $50 million," says Burge. "A great late Rembrandt might bring more. I do not think a $100 million sale impossible. Of course, the bubble might burst. But then new bubbles rise. I think it's here to stay."

What's Ahead

Perhaps it is no wonder that curators and scholars and museum directors tremble. But they do not despair. They have reason to be worried -- about hesitant collectors, art they cannot borrow and staggering insurance bills they can ill afford to pay. But their confidence remains. Scholarship advances, audiences increase, collectors are still flattered by the prospect of their pictures hanging at the Met and by the immortality produced by gifts of works of art. Anxious though they are, curators do not expect important shows to cease.

"Museums cooperate," says Charles F. Stuckey of the Art Institute of Chicago, who as a curator in Washington helped organize "The Art of Paul Gauguin." "They know they have to compromise when gauging valuations. When they lend each other paintings they tend to look at last year's, not at next year's, prices. We negotiate with collectors, too. And we're usually successful in calming people down."

But collectors like the thought that their paintings are worth fortunes, and museums have a duty to insure their works correctly.

"When I think about what's happened to the values of Gauguins, I try to see the bright side," says Dallas' Brettell. "High valuations were a problem, but they helped us do it right. When we said that we wanted to research Gauguin in Tahiti and Europe and South America, we were greeted with scorn and laughter. It was thought some sort of boondoggle. But it turned out that our expenses for travel, research, scholarship, were such a small proportion of the exhibition's budget that we were allowed to go ahead."

"I have been in this business for 25 years," says David Nash of Sotheby's, "and I have heard that worry -- about the end of exhibitions -- voiced often. But in the last five years we have had wonderful shows, one after another. Life has a way of arranging itself."