The failure of transcendental logic has the same origin as the failure of the empiristic (whether taken pure or in the mixed form in which Lotze presents it). It makes absolute and fixed certain distinctions of existence and meaning, and of one kind of meaning and another kind, which are wholly historic and relative in their origin and their significance. It views thought as attempting to represent or state reality once for all, instead of trying to determine some phases or contents of it with reference to their more effective and significant reciprocal employ--instead of as reconstructive. The rock against which every such logic splits is that either reality already has the statement which thought is endeavoring to give it, or else it has not. In the former case, thought is futilely reiterative; in the latter, it is falsificatory. The significance of Lotze for critical purposes is that his peculiar effort to combine a transcendental view of thought (_i. e._, of Thought as active in forms of its own, pure in and of themselves) with certain obvious facts of the dependence of our thought upon specific empirical antecedents, brings to light fundamental defects in both the empiristic and the transcendental logics. We discover a common failure in both: the failure to view logical terms and distinctions with respect to their necessary function in the redintegration of experience. III THOUGHT AND ITS SUBJECT-MATTER: THE DATUM OF THINKING We have now reached a second epochal stage in the evolution of the thought-situation, a crisis which forces upon us the problem of the distinction and mutual reference of the datum or presentation, and the ideas or "thoughts." It will economize and perhaps clarify discussion if we start from the relatively positive and constructive result just reached, and review Lotze's treatment from that point of regard.