XXXVIII. _LICHINACEAE._ Algal cells _Rivularia_. Thallus crustaceous, squamulose or minutely fruticose. XXXIX. _COLLEMACEAE._ Algal cells _Nostoc_. Thallus crustaceous, minutely fruticose, or squamulose to foliose. XL. _HEPPIACEAE._ Algal cells _Scytonema_. Thallus generally squamulose and formed of plectenchyma. _b. Not gelatinous when moist._ XLI. _PANNARIACEAE._ Algal cells _Nostoc_, _Scytonema_ or rarely bright-green, Protococcaceae. Thallus crustaceous, squamulose or foliose. XLII. _STICTACEAE._ Algal cells _Nostoc_ or Protococcaceae. Thallus foliose, and very highly developed, corticate on both surfaces. XLIII. _PELTIGERACEAE._ Algal cells _Nostoc_ or Protococcaceae. Thallus foliose, corticate above. 3. _Lecanorine group_ (apothecia with a thalline margin). The remaining families have all bright-green gonidia and nearly always apothecia with a thalline margin. The group includes several distinct phyla: XLIV. _PERTUSARIACEAE._ Thallus crustaceous. Apothecia, one or several immersed in thalline tubercles; spores mostly very large. XLV. _LECANORACEAE._ Thallus crustaceous or squamulose. Apothecia mostly superficial. XLVI. _PARMELIACEAE._ Thallus foliose, rarely almost fruticose or filamentous. Apothecia scattered over the surface or marginal, sessile. XLVII. _USNEACEAE._ Thallus fruticose or filamentous. Apothecia sessile or shortly stalked. XLVIII. _CALOPLACACEAE._ Thallus crustaceous, squamulose or minutely fruticose. Apothecia with polarilocular colourless spores. XLIX. _TELOSCHISTACEAE._ Thallus foliose or fruticose. Apothecia with polarilocular colourless spores. L. _BUELLIACEAE._ Thallus crustaceous or squamulose. Apothecia (lecideine or lecanorine) with two-celled, thick-walled brown spores (polarilocular in part). LI. _PHYSCIACEAE._ Thallus foliose, rarely partly fruticose. Apothecia with two-celled thick-walled brown spores (polarilocular in part). Subclass 2. Hymenolichens. There are only three closely related genera of Hymenolichens, _Cora_, _Corella_ and _Dictyonema_ with _Chroococcus_ or _Scytonema_ algae. There is reason to dissent from the arrangement in one or two instances which will be pointed out in the following examination of families and genera. B. FAMILIES AND GENERA OF ASCOLICHENS