In 1914, Pauli succeeded
Alfred Lichtwark as director of the
Kunsthalle Hamburg. At Hamburg, he oversaw the opening of the "new building" in 1919, and used the additional display space afforded by the enlarged gallery to reorganise the hanging of the collection into a chronological format. He also opened a Print Room in the Kunsthalle in 1922, reflecting an interest first sparked in Dresden. Pauli acquired more modern works, following Lichtwark's lead, including
Édouard Manet's
Nana of 1877. Pauli spoke at the funeral of his friend, the great "image historian"
Aby Warburg, in 1929. A fire in the Glass Palace in Munich in 1931 destroyed many important works which had been borrowed from the Kunsthalle Hamburg collection. A
Festschrift was given to Pauli in that year. In 1933, Pauli signed his name to the
Vow of allegiance of the Professors of the German Universities and High-Schools to Adolf Hitler and the National Socialistic State. Despite this, with the early stages of the
Nazi attack on modern art and Pauli's public friendships with leading Jewish intellectuals, including
Erwin Panofsky, he rapidly fell out of favour and was dismissed. His successor, Harald Busch, continued to defend the collection of modern art in the Kunsthalle. ==Life post-1933==