theoretically, from the standpoint of the Freudian theory of libido. If Abraham believes that through the withdrawal of the libido from the outer world the paranoid system or the schizophrenic symptomatology results, then this assumption is not justified from the standpoint of the knowledge of that time, because a mere libido introversion and regression leads, speedily, as Freud has clearly shown, into the neuroses, and, strictly speaking, into the transference neuroses, and not into dementia præcox. Therefore, the transference of the libido theory to dementia præcox is impossible, because this illness produces a loss of reality which cannot be explained by the deficiency of the libido defined in this narrow sense. It affords me especial satisfaction that our teacher also, when he laid his hand on the delicate material of the paranoic psychology, was forced to doubt the applicability of the conception of libido held by him at that time. The sexual definition of this did not permit me to understand those disturbances of function, which affect the vague territory of the hunger instinct just as much as that of the sexual instinct. For a long time the theory of libido seemed to me inapplicable to dementia præcox. With increasing experience in analytical work, however, I became aware of a gradual change in my conception of libido. In place of the descriptive definition of the “Three Contributions” there gradually grew up a generic definition of the libido, which rendered it possible for me to replace the expression “psychic energy” by the term “libido.” I was forced to ask myself whether indeed the function of reality to-day does not consist only in its smaller part of libido sexualis and in the greater part of other impulses? It is still a very important question whether phylogenetically the function of reality is not, at least in great part, of sexual origin. To answer this question directly in regard to the function of reality is not possible, but we shall attempt to come to an understanding indirectly.