His view is based on a study of the development of certain lichen fungi that seem able to adapt themselves to either kind of algal symbiont. He found[997] in _Euopsis_ (_Pyrenopsis_) _granatina_, one of the Pyrenopsidaceae, that certain portions of the thallus contained blue-green algae, while others contained _Palmella_, and that these latter, though retrograde in development, might become fertile. The granules with blue-green gonidia were stronger, more healthy and capable of displacing those with _Palmella_, but not of bearing apothecia, though spermogonia were embedded in them—a first step, according to Forssell, towards the formation of apothecia. These granules, not having reached a fruiting stage, were reckoned to be of a more recent type than those associated with _Palmella_. In other instances, however, the line of evolution has been undoubtedly from blue-green to more highly evolved bright-green thalli. The striking case of similarity between _Psoroma hypnorum_ (bright-green) and _Pannaria rubiginosa_ (blue-green) may also be adduced. Forssell considers that _Psoroma_ is the more ancient form, but as the fungus is adapted to associate with either kind of alga, the type of squamules forming the thallus may be gradually transformed by the substitution of blue-green for the earlier bright-green—the _Pannaria_ superseding the _Psoroma_. There is a close resemblance in the fructification—that is of the fungus—in these two different lichens. Hue[998] shares Forssell’s opinion as to the greater antiquity of the bright-green gonidia and cites the case of _Solorina crocea_. In that lichen there is a layer of bright-green gonidia in the usual dorsiventral position, below the upper cortex. Below this zone there is a second formed entirely of blue-green cells. Hue proved by his study of development in _Solorina_ that the bright-green were the normal gonidia of the thallus, and were the only ones present in the growing peripheral areas; the blue-green were a later addition, and appeared first in small groups at some distance from the edge of the lobes. The whole subject of cephalodia-development[999] has a bearing on this question. These bodies always contain blue-green algae, and are always associated with Archilichens. Mostly they occur as excrescences, as in _Stereocaulon_ and in _Peltigera_. The fungus of the host-lichen though normally adapted to bright-green algae has the added capacity of forming later a symbiosis with the blue-green. This tendency generally pervades a whole genus or family, the members of which, as in Peltigeraceae, are too closely related to allow as a rule of separate classification even when the algae are totally distinct. C. EVOLUTION OF PHYCOLICHENS