With the passing of years, and with each new Guild administration, the relationship of the Guild and the Society became more confused, until, on April 30, 1937, a special committee meeting made up of representatives of the Fine Arts Society and the Art Guild held a study, for the purpose of clarifying this relationship. Reginald Poland gave a brief history of the connection between the two organizations, then they discussed the financial relationship, in which the Society spent $2400 for the Guild and the Guild only raised $600 from its membership fees. They also discussed the Guild's gallery space in the Fine Arts Gallery and the feasibility of the Guild also using Spanish Village for meetings and exhibitions
     As a result of this study, a proposal was made in January 1938. Elizabeth Sherman wrote this proposal.

Report of the Committee for the Study of the Relations between the Fine Arts Society, the Art Guild, and the Spanish Village

     "During the study of this problem the following issues were brought to light.

1. The Fine Arts So. finds the Art Guild dues do not meet expenses and that the members are dissatisfied and critical.
2. The Art Guild feels that the individual members have no voice in the organization and that their affairs are run too much by the Fine Arts So.
3. Some members of the Spanish Village would like to join the Fine Arts So. for three dollars but do not wish to join the Art Guild club life.
4. Many members of the Art Guild are inactive excepting for the annual exhibition.
5. There is an irreconcilable difference of opinion regarding new members. One group wants a strictly professional organization much more limited in membership then the present Guild. The other group wants a broader membership with more opportunities for the unknown painter.

     The committee considers these findings and discussed them with many interested groups. It was decided that no new class of membership in addition to the present, teacher, student, and Art Guild memberships was advisable.
     The suggestion was made that the Art Guild and Spanish Village unite, but that was declared unsatisfactory by both parties.
After much thought and discussion the following plan was evolved as a possible improvement on the p[resent situation.

1. The Art Guild should no longer be considered a separate organization from the Fine Arts So., with separate officers, social committee, etc., but simply be called Artist members of the Fine Arts So., keeping the same membership as at p[resent.
2. That among the Artist members of the Fine Arts So., small informal groups, like clubs be formed for group exhibitions, discussions, etc., in which like-minded people could get together. Each group activity to be handled exclusively by its own members without the trouble or expense to the Fine Arts So., and complete freedom.
     Each group could have a chairman. These chairmen could meet together as a committee to pass on new artist members and arrange for the annual exhibition, which would be, carried o otherwise as before.
Benefits of the plan,
1. We feel No.1 part of the plan should take care of people, who because of activity in other organizations or interest in their own work, do not want the responsibility of active club life, also those who have retired from active painting.
2. The plan should reduce expenses as it eliminates most of the Art Guild correspondence.
3. By doing away with the separate organization and officers we hope to bring about more feeling of unity and less friction.
4. In the small groups we hope the artist will find closer and friendlier contacts, which may prove stimulating and helpful. Also through handling meetings and exhibitions themselves, many individuals will develop a more sympathetic understanding of the problems of the Gallery.
     The committee further recommends, that as no plan is certain of success until it has been tried, that the present set-up of the Art Guild be continued through 1938, and that the group plan be tried first by small series of small exhibitions in small rooms.
     These could be announced by a postcard giving dates for print show, modernist show, water-color show etc. Eight groups have been suggested. A deadline date would be set for signing up as soon as the members had enrolled each group would be responsible for organizing and hanging its own show.
     These exhibitions would give the members an occasion for meeting together in small groups and carrying things out for themselves. This should demonstrate whether that part of the plan is practical and desirable.
     Both the president and the executive committee of the Art Guild approved with enthusiasm this trial of the plan and wish to have a general discussion of the whole plan at their annual meeting in April. By that time two or three of the shows would have been held and all the groups would be under way so the enthusiasm of the membership and success of the shows could be estimated.

Respectfully submitted by the chairman
Elizabeth Sherman.

     Most of the plan was successful but the Guild retained its own officers and continued to operate as a slightly separate entity. A revised proposal was accepted by both organizations, that the Art Guild become an artist-based committee of the Fine Arts Society, who would be responsible for organizing and hanging their own shows. A vote was taken by the Guild membership on putting all of their monies into a merged account with the Fine Arts Society. It passed overwhelmingly, with very few opposed. Notably, Maurice Braun cast one of the nay votes. This new plan was put into operation with their first show in 1939.
     In an article written for the San Diego Union in the January 9, 1938 issue, internationally known artist Walt Kuhn made several comments about the artists and our region during his first visit to San Diego. The following are excerpts from that article:

San Diego Fertile Field for Creative Art, Says Walt Kuhn, in Visit Here

Painter Known Widely for Excellent Work Believes Local Talent Should Be Spurred to New Efforts.

     "Walt Kuhn, New York, who is an artist of international renown, said yesterday 'San Diego and its environs are the most fertile ground for a creative artist anywhere in the United States.'
     'You have lots of talent in San Diego because I can see it in your Fine Arts gallery,' Kuhn declared, 'but I am afraid some of them are getting lazy.'
Urges S. D. Artists
     Kuhn declared that 'San Diego should become as important to America as Florence was to Italy.'
     'I feel like taking a sharp stick to San Diego artists, whose ability is unsurpassed if they only will let themselves go - be their own selves and do big things. They have everything; their works show this.'
     'Sometimes I wonder if artists do not try too much to follow some foreign appeal, often when they have in themselves the ability to develop an art that would be national in character but international in appeal.'…
     Kuhn is making his first visit to San Diego. It would take several hundred words to tell what 'Who's Who in America' has to say about him.
'Just skip all that,' he said with a wave of his hand. 'If you wish to quote me as praising your fine arts' gallery and Mr. Poland's wise guidance in making it one of the greatest of its size in America, that will be all right with me.'…"

     The San Francisco Golden Gate Exposition of 1939 attracted a large number of exhibitors from San Diego. Among the Guild members who participated were, Annie Baldaugh, Belle Barnanceanu, Georgia Bemis, George Corbit, Dan Dickey, Theodosia Durand, Fred Hocks, Mabel Hutchinson, Everett Gee Jackson, Charles Reiffel, Wanda Walden, and Norah Woodward.

     The Art Guild celebrated its Silver Jubilee. Mrs. Grant Wood addressed the gathering. At the reception for the Guild exhibition, on November 28, 1939, an appropriate playlet written by Aime B. Titus called "The Past and Future of the Guild" was staged in the Old Masters Gallery with Louis Renard of the Globe players and Louise Darby directing. The actors were costumed in suits and frocks of 25 years ago. The "Past" was depicted by several early members, Miss Mary Belle Williams, Alexander Murray, Alfred B. Mitchell, Misses Alice and Leda Klauber, William Pierce, A. B. Titus, Lionel Sherwood, Mrs. A. R. Valentien, and Miss Darby. Members of the Globe players took care of the "Future." There were 112 paintings exhibited with the "Lessier-Farnham Memorial award of $50, named in honor of Ammi Farnham, San Diego's first artist, was given to Margot Rocle for her painting "Anna in the Mirror."
     1939 the Art Guild had 224 members and as reported in the Fine Arts Society's annual report, the Guild, that year, had its "ups and downs." It was also the beginning of World War II. Miss Elizabeth Sherman worked with the Guild on two benefits for Spanish Children in 1939. During the war the Guild continued its socially responsible efforts.

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