In 1911, his purchase of Vincent van Gogh's Poppy Field caused a protest, led by Carl Vinnen, a German painter from Worpswede.
Like his contemporary gallerist Hugo von Tschudi, Pauli collected works of modern painting at a time when it was deeply unattractive to the broader public, and unappreciated by many art critics.
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.
[6] 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.