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The establishment of the Theodoro-Palatinae had a strong cultural and educational policy link and intended to foster the sciences and arts in the Palatinate.Under Charles Theodor's reign the academy received enormous funding of more than 35,000,000 Gulden and contributed considerably to the cultural, economical and infrastructural development of Southern Germany during the second half of the eighteenth century.

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The final construction was not completed until 1760.

Karl Philip died in 1742 and was succeeded by a distant relative, the young Count Palatine of Sulzbach and later Duke of Bavaria Charles Theodor.

During Napoleon's reorganization of Germany, the Electorate of the Palatinate was split up and Mannheim became part of the Grand Duchy of Electorate-Bavaria, thus losing its capital/residence status.

Although Mannheim kept the title of "residence", the Mannheim Palace was used merely as accommodation for several administrative bodies.

In 1778, a second school was established at Mannheim's palace – the Commercial School (Großherzogliche Handelsschule) – that served as school for merchant sons and which was later named into "Grand-Ducal Commercial Academy".

Further associated institutions included the Mannheim Observatory, the Ducal Natural History Collection, the Ducal Physical Cabinet, the Mannheim Palace Botanical Garden and the in 1769 founded Mannheim Academy of Fine Arts.The glamour of the Elector's court and Mannheim's then famous cultural life lasted until 1778 when Charles Theodor became Elector of Bavaria by inheritance and moved his court to Munich.Things worsened further during the Napoleonic Wars, when Mannheim was besieged.In addition, the reorganization of the Palatinate and Bavaria made the Bavarian Academy of Sciences and Humanities a major concurrent for academic funding.The consequences of religious strife, increased rivalry for funding and the Napoleonic Wars put an end to the "Theodoro-Palatinae", which was finally closed on February 17, 1803 after forty years of existence.Charles Theodor developed Mannheim into a German centrum for Arts and Sciences.