Once upon a time, a stranger comes to town, flashes a knife, and proceeds to carve a small sparrow from a piece of wood. Suddenly, the carving shakes its wings and flies away. Dragonflies, mice, and fish follow. The sheriff of the town arrests the stranger on fabricated charges, demanding he turn over the knife—the sheriff and the mayor want to use it to carve golden coins—and the stranger grudgingly gives it to them. When the knife does nothing but nick the mayor's fingers, however, he angrily flings it into the fireplace. Clementine, a local girl, retrieves the knife from the flames and returns it to the stranger, who thanks her and explains that the magic is not in the knife. It lies elsewhere, he says, and suggests that Clementine try carving. Although her whittled bird won't fly at first, Clementine fires it with her imagination, and it takes off through the trees. Armstrong's (That Terrible Baby, p. 551, etc.) folkloric tale is set to Vasiliev's old-Flemish-style renderings- -deft, rich paintings that lack the dynamism necessary to animate this lightly told morality play but are entrancing enough to keep the viewer's attention. A fine blast at greed and skulduggery. (Fiction/Picture book. 5+)