The authors learn from Dr. Ernest Jones that Freud began planning this paper in June, 1910, and was working at it simultaneously with the Schreber case history. His progress at it was slow, but on October 26 he spoke on the subject before the Vienna Psycho-Analytical Society, but found the audience unresponsive, and was himself dissatisfied with his presentation. In the psychology which is founded on psycho-analysis the authors have become accustomed to taking as our starting-point the unconscious mental processes, with the peculiarities of which they have become acquainted through analysis. Thinking was endowed with characteristics which made it possible for the mental apparatus to tolerate an increased tension of stimulus while the process of discharge was postponed. It is essentially an experimental kind of acting, accompanied by displacement of relatively small quantities of cathexis together with less expenditure of them.