Now if delusions are to be an index to deterioration they must in some way hold a mirror to the changes in the personality, repeat them or prefigure them. If we generalize our conception of functional dementia, we can say that one of its most striking features is a destruction of the faculty of appropriate reaction, a loss of what one may term the sense of reality. The patient in direct proportion to the degree of his dementia loses his capacity to recognize the reality of his environment or his relationship to it, and builds up more and more a world of his own in which he lives untroubled by the demands of adaptation. No one who has ever argued with a paranoic will forget how keen a sense of reality he may retain, how logical his arguments are, and how reasonable his delusions appear, if only some one point be granted. With the praecox, however, the opposite impression may be quite as striking. His delusions are bizarre, inconsistent, kaleidoscopic; he has no logical explanation and cannot even state them consecutively. And all gradations from pure paranoia to dementia praecox seem to have corresponding losses in the sense of reality as embodied in delusions. May we not hope to find in the content of the psychosis some objective criterion as to the degree in which the sense of reality is lost, with all that it implies? But what takes the place of the sense of reality or what causes it to go? With what tendency of the psychotic individual is it in conflict? The answer is a psychological truism--the indulgence in fancies. Imagination, of course, is essential to every human being, no purposeful action can be instituted without its first being carried out in imagination. Phantastic thinking begins when the subject fails to apply the test of reality to his mental image and exclude it if it be not adapted to realization. If environment or internal inhibitions prevent this realization, however, the craving: lying back of the fancy must be diverted to a more practical channel--the normal solution--or the fancy must persist in spite of its impracticability. This latter process is the germ of the psychosis. But not its development. A certain compromise may be reached--he who digs for gold in his back-yard is not so crazy as he who reaches out his hand for the moon. Nor is the paranoic who chooses to put his interpretation on the surliness of his employer as far estranged from reality as the praecox who recognizes his employer in the person of the physician. The content of the psychosis may then express the relative strength of the two antagonistic factors, sense of reality and fancy, the two factors whose relative importance decide the issue for sanity or insanity.