In the development of this hospital system, the Public Health Service has divided its hospitals into three large groups, namely; hospitals for general medical and surgical cases, for cases of tuberculosis, and for cases of neuropsychiatry. It has been unable to develop this system of hospitals with the uniformity desirable under the circumstances, and has, therefore, found difficulty in meeting the needs of those suffering from neuropsychiatric and tuberculous disorders. This demand, however, has of late been far more adequately met, especially with regard to tuberculosis. In addition to the development of its hospital system, the Public Health Service, soon after assuming its responsibilities in this work, created what was designated as the District Supervisors’ organization. The United States was divided into fourteen districts and, in some large center of population in each of these districts, there was established a district headquarters, with a sub-district organization reaching out even to the individual counties. This organisation constituted a decentralizing agency, and, as such, served a most useful and important function, not only in the work of the Public Health Service, but also in the work of the War Risk Insurance Bureau. This entire organization, which had grown enormously, was transferred to the Bureau of War Risk Insurance in April, 1921, with its complete personnel. It is now operated by the U. S. Veterans’ Bureau as its decentralizing agency and is still performing a necessary and important function in the work of that Bureau. It was also necessary to create a greatly extended purveying service for supplying the necessary equipment, etc., to the hospital system which had been inaugurated. The Purveying Service has grown enormously and, at the present time, is not only purveying to the hospitals of this Service, but is also rendering assistance to the U. S. Veterans’ Bureau in purveying for its offices and its medical facilities. The creation of an Inspection Service also became a necessity, in order that the hospitals of this Service might be kept under constant surveillance, and that all complaints might be carefully investigated. This Inspection Service has now been reduced somewhat, but still is functioning satisfactorily and has also rendered a great deal of assistance to the U. S. Veterans’ Bureau in making certain inspections for that Bureau. In addition to these matters, the Public Health Service also began the creation of a large system of out-patient dispensaries for the care of veterans of the World War and developed this work considerably. Up to recently, it had in operation some 58 of these dispensaries, many of them equipped and staffed for all forms of out-patient diagnosis and treatment.