It is on these lines that the scheme is sketched which I inserted into the speculative section of my ‘Traumdeutung’ in 1900. If one reflects how little we know from other sources about the origin of consciousness the pronouncement that _consciousness arises in the place of the memory-trace_ must be conceded at least the importance of a statement which is to some extent definite. The system Bw. would thus be characterised by the peculiarity that the excitation process does not leave in it, as it does in all other psychic systems, a permanent alteration of its elements, but is as it were discharged in the phenomenon of becoming conscious and vanishes. Such a departure from the general rule requires an explanation on the ground of a factor which comes into account in this one system only: this factor which is absent from all other systems might well be the exposed situation of the Bw. system—its immediate contact with the outer world. Let us imagine the living organism in the simplest possible form as an undifferentiated vesicle of sensitive substance: then its surface, exposed as it is to the outer world, is by its very position differentiated and serves as an organ for receiving stimuli. Embryology, repeating as it does the history of evolution, does in fact show that the central nervous system arises from the ectoderm; the grey cortex of the brain remains a derivative of the primitive superficial layer and may have inherited essential properties from this. It would then be easily conceivable that, owing to the constant impact of external stimuli on the superficies of the vesicle, its substance would undergo lasting alteration to a certain depth, so that its excitation process takes a different course from that taken in the deeper layers. Thus a rind would be formed which would finally have been so burned through by the effects of stimulation that it presents the most favourable conditions for the reception of stimuli and is incapable of any further modification. Applying this idea to the system Bw., this would mean that its elements are not susceptible of any further lasting alteration from the passage of the excitation, because they are already modified to the uttermost in that respect. But they are then capable of giving rise to consciousness. In what exactly these modifications of the substance and of the excitation process in it consist many views may be held which as yet cannot be tested. It may be assumed that the excitation has, in its transmission from one element to another, to overcome a resistance, and that this diminution of the resistance itself lays down the permanent trace of the excitation (a path): in system Bw. there would no longer exist any such resistance to transmission from one element to another. We may associate with this conception Breuer’s distinction between quiescent (bound) and free-moving ‘investment-energy’ in the elements of the psychic systems;[12] the elements of the system Bw. would then