EVEN as multiculturalism is debated on campuses across the country, challenging the dominance of the European tradition, Harvard University is celebrating the opening of new quarters for a most curious art collection. Named for its principal donor, a German mail-order magnate, Werner Otto Hall is a sleek, handsome structure, and the home of the Busch-Reisinger Museum.Dedicated to the art of north and central Europe, especially Germany, the Busch-Reisinger is, among other things, a fascinating survivor of an era whose views on art and education differ mightily from our own. The museum's journey to this new building has been dramatic and complex. The Busch-Reisinger was founded by Harvard's German Department in 1901, but it is rooted in the mid-19th century, in the strong affinity intellectual New Englanders felt for German culture. (Here, for instance, is Emerson, sermonizing in 1951: "It will hereafter be noted that the events of culture in the Nineteenth Century were, the new importance of the genius of Dante, Michel Angelo, and Raffaele to America; the reading of Shakspeare; and, above all, the reading of Goethe.") [sic] The museum's first home was the college gymnasium. Its first collection was an assortment of plaster casts of German sculpture, a gift from no less than Kaiser Wilhelm II. In 1910 the German-American brewer Adolphus Busch, of the Anheiser-Busch brewery, donated $265,000 for a new building to be designed by Dresden architect German Bestelmayer. Construction of what became Adolphus Busch Hall - the Busch-Reisinger's home until recently - began in July 1914, just weeks before the start of World War I. As a former curator noted, this was "the worst possible circumstance for the promotion of German culture in any form." So violent was antiGerman feeling that, although finished in 1917, the building did not open until 1921. The Germanic Museum, as it was then called, flourished in the 1920s. With its vaguely Baroque facade, and moody Romanesque, Gothic, and Renaissance interiors, Bestelmayer's building pleased the public. It also suited the collection of reproductions, which ranged from the monumental (casts of the Rood Screen of Naumburg Cathedral and the Golden Portal of Freiburg's Marienkirche) to the personal (electroplate copies of Merovingian brooches and 16th- century swords). All this historicist emphasis, however, couldn't insulate the small New England teaching museum from 20th-century politics. In 1942, after the United States declared war against Germany, the museum was, for the second time in less than 25 years, closed. After World War II, it seemed the museum might quietly expire. To many at Harvard it was anomalous - an odd and disturbing relic of stale sentiment. Yet it held on, and, paradoxically, the very cataclysm that jeopardized its existence served indirectly to enrich it. The Busch-Reisinger had already, in the '30s, shifted its focus from copies - the typical stuff of 19th-century museums - to original work. In the '40s it began energetically to acquire a good deal of the art the Nazis had deemed "degenerate" and had confiscated from European museums. Now among the most valuable art of the century, it was purchased then for shockingly low prices. This art defines the Busch-Reisinger today, philosophically as well as artistically; and it seems artistic justice that a museum founded in a time of intense German nationalism should now house the work of victims of that nationalism. It is a rich collection, including, among others, oil paintings by Heckel, Kirchner, Feininger, and Beckmann (including his 1927 masterpiece, "Self-Portrait in Tuxedo," bought for $600); drawings by Kokoschka and Schlemmer; paintings, photographs, furniture, and architectur al drawings by Gropius, Albers, and other Bauhaus masters. The museum has continued to emphasize modern art, acquiring works by Klimt and Schiele, by Klee, Kandinsky, El Lissitsky, and Malevich, and by contemporary artists such as Gerhard Richter and Max Bill. Unfortunately, Busch Hall proved an imperfect showcase for original art. Lacking good storage, lighting, exhibit space, and climate control, it was, in curator Peter Nisbet's words, "not kind to the art." Just as troubling, its quarter-mile distance from the Fogg Art Museum (Harvard's major gallery) led to an uneasy sense of German art's isolation from the European tradition (a point about which the Busch-Reisinger is understandably sensitive). The solution to this dilemma is, of course, Werner Otto Hall. A self-contained structure whose three floors include gallery, library, office, and storage space, it is actually an addition to the Fogg: the Busch-Reisinger keeps its identity while it moves next door to art of other countries. After the dreamy revivalism of Busch Hall it seems fitting that Werner Otto Hall, which houses original modern art, be unambiguously contemporary. The architects, Gwathmey Siegel and Associates of New York, have become well known through two decades of practice for inventive interpretations of Corbusier's International Style. Well-sited and proportioned, Otto Hall is responsive to its neighbors, to the red-brick Georgian-revival Fogg and to the poured-concrete curves of Corbusier's Carpenter Center. Yet its stylistic differences - the taut shapes and crisp materials (stack-bonded limestone, porcelain panels, glass block) - enliven this corner of the campus. Curator Nisbet feels that Otto Hall encourages "careful and accurate looking." Certainly the six small galleries, each with light-colored walls, subtly patterned ash floors, high-tech skylights, and three well-placed windows make for a concentrated experience. These precise and neutral rooms urge full focus on the art. In them we are moved by an awareness - as we might not be in a large, more inclusive museum - that many of these artists worked in precarious and perhaps fearful conditions, eventually bec oming exiles, in the terrible stretch of the century that was either prewar or postwar, and sometimes both. The museum's reproductions remain in Busch Hall - now closed for renovations. Some have become quite valuable, because the originals have been eroded by pollution or were destroyed in World War II.