On March 12, 1938, Hitler's Nazis invaded Austria, meeting no resistance from the Austrian army. The day before, the Austrian chancellor had resigned and been replaced by a Nazi supporter. Freud, despite insisting throughout his life on his hatred for Vienna, had stayed in the city as long or longer than most of his colleagues, some of whom had fled central Europe as early as 1932. But with the Nazi takeover, the situation in Vienna quickly became intolerable. On March 13, the Vienna Psychoanalytic Society voted to dissolve and recommended that all of its members flee Austria and reconvene, if possible, wherever Freud took up residence. Freud's home was raided several times, and on March 22, his daughter Anna Freud was arrested and questioned by the Gestapo. Fortunately, no one was hurt and although money and valuables were stolen from Freud's home, his private study was left untouched. The property of the psychoanalytic publishing house, on the other hand, which was located a few doors down from Freud's home and office, was confiscated in its entirety.

The Nazis strictly controlled emigration, but with the help of Freud's former patient Marie Bonaparte, a princess of Greece and Denmark, and the American Ambassador to France, W. C. Bullit, exit permits were obtained for Freud and his immediate family. On May 5, Minna Freud, who had been recuperating in a sanitarium, left for London with one of Freud's former patients and constant supporters, the American Dorothy Burlingame. Freud's oldest son and daughter, Martin and Mathilde, also left Vienna before Freud did. Finally, on June 4, Freud, Martha, and Anna boarded the Orient Express for Paris. They stayed in Paris for half a day, at the apartment of Marie Bonaparte, and then continued toward London. Freud's four elderly sisters, Rosa, Dolfi, Paula, and Marie, all stayed in Vienna. Although Marie Bonaparte subsequently tried to get them out, she did not succeed in gaining permission from the Nazi authorities. All four sisters died in Nazi concentration camps during the course of the war.

Freud, Martha, and Anna arrived on the shores of England on July 6. Freud's dog, Lün, had to be quarantined for six months, but in all other ways they were given an extremely courteous welcome by the British. Freud continued to treat patients and to work on his last books, the controversial Moses and Monotheism and An Outline of Psycho-Analysis, which remained incomplete at the time of Freud's death.

In September, Freud settled into his last home, at 20 Maresfield Gardens, a house that Anna Freud was to keep until her death forty years later. Unfortunately, Freud's joy at the pleasures of their new home, including the joy of freedom from Nazi persecution, was tempered by a surprising homesickness for Vienna and by an unpleasant operation that took place at the beginning of September. Since Freud's first operations for mouth cancer in 1923, numerous pre-cancerous growths had appeared and been removed. In 1936, however, a cancerous growth had reappeared. Now, in 1938, the cancer had returned once more. Removing it this time required a rather severe operation that left Freud significantly weakened.

Moses and Monotheism, which appeared in August of 1938, was highly controversial. It is no exaggeration to say that it was received with a mixture of outrage and disbelief. Freud was not unused to such receptions, but it had been a long while since a book of his had been so roundly criticized by supporters and enemies alike. The main thesis of the book was that the Moses who led the Jews out of Egypt had been an Egyptian prince, not, as is usually supposed, a Jew. The book also argued that Moses had been killed by his followers after the exodus and replaced by a Jew who was, coincidentally, also named Moses. Freud backed up his arguments, as usual, with a bevy of psychoanalytic interpretations and speculation. There is no sign that Freud was particularly bothered by the criticisms. He had long been forced to develop a thick skin.

In February of 1939, despite the drastic surgery that had been performed only five months earlier, Freud's cancer recurred. This time the doctors deemed the tumor inaccessible and inoperable. Freud would have to live with it until he died. Over the course of the next eight months, Freud grew increasingly weak, and the tumor increased in size. By September, it had eaten through to the outside of his cheek, creating a large, unpleasant open sore. On September 21, Freud, in severe pain, asked his doctor to administer a dose of morphine large enough to ease him out of life. His doctor complied, giving him several large injections of morphine over the course of the next few days. Freud died near midnight on September 23, 1939. He was cremated three days later, on September 26, and Ernest Jones, who was to become his first and most authoritative biographer, gave the funeral oration.

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