Since it opened to the public in 1921 --the first museum of modern art in the county -- The Phillips Collection has been a humanist oasis, an intimate picture gallery where visitors can sit quietly in big chairs and think big thoughts while contemplating great paintings by Renoir, Cezanne, Van Gogh, Degas, Bonnard, Vuillard, Klee and Rothko. There are no lengthy labels which must be read, no arthistorical jargon to be deciphered. The visitor is invited only to share the sheer joy of looking, the passionate eye of the museum's creator, Duncan Phillips.

Now, as the museum faces an uncertain future, the Simthsonian Traveling Exhibition Service has organied a representative selection of 37 paintings and watercolors called The Phillips Collection in the Making, 1920-1930. The exhibition will have an 18-month tour of 10 American museums beginning May 5 at The Phillips. The exhibition seeks to explore the formative years of the museum and to examine the developing taste for modernism in the '20s as exemplified in the words and collecting habits of Duncan Phillips. It is the first scholarly study to examine the museum in its larger context.

The decade between the end of World War I and the Great Depression was an extraordinary one in the history of American art collecting, a time of great optimism and growth. The Armory Show had taken place in 1913, shocking Americans into the realization that profound changes in art were underway abroad -- Impressionism had given way to various post-Impressionist styles, including Cubism, Futurism, Dadaism and German Modernism.

A new generation of contemporary art collectors was spawned, including John Quinn, whose collection was shown last year at the Hirshhorn Museum and Sculpture Garden. Phillips was among the early group, but at the rear guard. He was buying chiefly American Impressionists and Ashcan School painters, without the help of any agents or advisers.

Phillips' tastes in art changed radically in the course of his lifetime, and one of the more amusing aspects of this exhibition's catalogue is the resurrection of early criticism he wrote in the wake of the Armory Show, which he called "stupefying in its vulgarity."

To art historian Milton Brown, "The evolution of the taste for modernism in America had its documented expression in the odyssey of Duncan Phillips. Originally a rabid detractor of modernism he developed in time into a collector and defender of all but its most radical manifestations, stretching as far as Fauvism."

Throughout his life Phillips was to remain predisposed to painterly painting, fine color, recognizable subject matter (though this was a rule he later bent) and a love of nature. Ultimately the quality of his collection, not his love of the new, made it so extraordinary.

From the earliest days at Yale, Phillips had a mission in art. Born heir to a steel fortune which precluded the need to work, Phillips set out for a career in literature, but soon found, as he later wrote, "that I had more real insight and sympathy for pictorial and decorative art. The painter's point of view is too little understood, and I aimed to make myself more and more receptive to it that I might be a true interpreter."

In 1916, Duncan and his brother convinced their parents to provide $10,000 each year for investment in contemporary American art. In 1918, when his brother and father died, Duncan began planning The Phillips Memorial Gallery (renamed The Phillips Collection in 1960) which was to occupy him until his death in 1966.

By 1921, when it opened to the public in a remodeled part of the family manse at 1600 21st St. NW, Phillips had acquired 240 paintings as well as an artist-wife, Marjorie Acker, who was to play a major role in the spirit of his collecting.

By the end of the '20s, they had acquired 600 paintings together, and by the end of Duncan's life, they had agreed to the purchase of 2,000 works, including a large "encouragement collection" of paintings by aspiring artists.

Once the museum was underway, Phillips had no doubts as to how it would be run, and it is in the field of museology that he made his greatest innovations. "I will buy and exhibit only what I can genuinely respect and enjoy," he wrote. The museum was, he said, "an unorthodox museum, with a way of its own in not segregating periods and nationslities, the better to show the universality of art and the continuities of such ancient seeing habits as realism, expressionism and abstraction." This democratic, non-didactic view of art as creative enterprise, rather than as material culture, is at the heart of the museum's appeal.

So is the setting. Phillips wanted an atmosphere where "visitors feel at home in the midst of beautiful things and subconsciously stimulated while consciously rested and refreshed." It is a tribute to the merit of this idea that, according to National Gallery director J. Carter Brown, the "pod" galleries of the new $100 million East Wing were designed to emulate the ambience of the Phillips Collection.

An important innovation was the acquisition and display of "units" of work by a single artist, emphasizing individual development, rather than larger historical and stylistic swings. Thus, by the end of the '20s, there were five or more paintings by Bonnard, Braque, Daumier, O'Keeffe, Marin, Prendergast, Ryder, Dove, Tack and many others.

There were also great masterpieces by Daumier, Cezanne, Klee and Renoir, notably the great "Luncheon of the Boating Party" purchased for a record $125,000 in 1923. Announcing that acquisition, Phillips wrote, "For such an American Prado as I am planning, there must be nothing but the best."

In the spring following the Crash of 1929, The Phillips Memorial Gallery offered 43 paintings for sale. "It is a collection in the making," explained Phillips. "Changes are inevitable, and wherever we are under unusual financial strain, there is only one thing for us to do -- and that is to sell."

That is the one piece of advice his dutiful heirs are least likely to take, despite the current fiscal crunch. Duncan's son Laughlin Phillips, who founded Washingtonian Magazine in 1965, recently divested himself of that responsibility and plans to devote himself entirely to the museum.

Laughlin Phillips has his work cut out for him. Income from the $3 million endowment in 1978 was $180,000; expenses ran to more than $400,000. Though some of the deficit was made up through grants and sales of capital investments, a loss of $140,000 remained. "The Phillips must reach out and find new sources of support," said Phillips, "and correct the impression that we don't need any help. We do." CAPTION: Picture 1, The Phillips Collection, Washington's best-loved picture gallery, occupies the old family manse at 1600 21st Street N.W. near Dupont Circle. Above: Vuillard's "The Newspaper," among 37 paintings in "The Phillips Collection in the Making, 1920-1930," opening May 5 at the gallery. Courtesy of the Phillips Collection; Picture 2, No Caption By Mike Mitcheler; Pictures 3 or 4, Duncan and Marjorie Phillips as photographed by Bachrach in 1921, the year they married and the year the collection was opened to the public.; Picture 5, the ook-panelled music room where chamber music is performed on Sunday afternoons. Renoir's "Luncheon of the Boating Party," the collection's most famous painting, is at left and Cezanne's "Seated Woman in Blue" at right.