a so-called equivalent of reality. This compensation is built up piece by piece, and it is most interesting to observe the psychological materials of which this inner world is composed. This way of conceiving the transposition and displacement of the libido has been made by the every-day use of the term, its original pure sexual meaning being very rarely recalled. In general, the word “libido” is used practically in so harmless a sense that Claparède, in a conversation, once remarked that we could as well use the word “interest.” The manner in which this expression is generally used has given rise to a way of using the term that made it possible to explain Schreber’s “end of the world” by withdrawal of the libido. On this occasion, Freud recalled his original sexual definition of the libido, and tried to arrive at an understanding with the change which in the meantime had taken place. In his article on Schreber, he discusses the question, whether what the psychoanalytic school calls libido, and conceives of as “interest from erotic sources” coincides with interest generally speaking. You see that, putting the problem in this way, Freud asks the question which Claparède practically answered. Freud discusses the question here, whether the loss of reality noticed in dementia præcox, to which I drew attention in my book,[6] “The Psychology of Dementia Præcox,” is due entirely to the withdrawal of erotic interest, or if this coincides with the so-called objective interest in general. We can hardly agree that the normal “fonction du réel” [Janet] is only maintained through erotic interest. The fact is that, in many cases, reality vanishes altogether, and not a trace of psychological adaptation can be found in these cases. Reality is repressed, and replaced by phantasies created through complexes. We are forced to say that not only the erotic interests, but interests in general—that is, the whole adaptation to reality—are lost. I formerly tried, in my “Psychology of Dementia Præcox,” to get out of this difficulty by using the expression “psychic energy,” because I could not base the theory of dementia præcox on the theory of transference of the libido in its sexual definition. My experience—at that time chiefly psychiatric—did not permit me to understand this theory. Only later did I learn to understand the correctness of the theory as regards the neuroses by increased experience in hysteria and the compulsion neurosis. As a matter of fact, an abnormal displacement of libido, quite definitely sexual, does play a great part in the neuroses. But although very characteristic repressions of sexual libido do take place in certain neuroses, that loss of reality, so typical for dementia præcox, never occurs. In dementia præcox, so extreme is the loss of the function of reality that this loss must also entail a loss of motive power, to which any sexual nature must be absolutely denied, for it will not seem to anyone that reality is a sexual function.