Further observations on gonidia were made by E. Fries[160]: he found that the green cells escaped from the lichen matrix and produced new individuals; and also that the whole thallus in moist localities might become dissolved into the alga known as _Protococcus viridis_; but, he continues, “though these _Protococcus_ cells multiplied exceedingly, they never could rise again to the perfect lichen.” Kützing[161], in a later account of _Protococcus viridis_, also recognized its affinity with lichens; he stated that he could testify from observation that, according to the amount of moisture present, it would develop, either in excessive moisture to a filamentous alga, or in drier conditions “to lichens such as _Lecanora subfusca_ or _Xanthoria parietina_.” [Illustration: Fig. 3. _Coenogonium ebeneum_ A. L. Sm. Tip of lichen filament, the alga overgrown by dark fungal hyphae × 600.] A British botanist, G. H. K. Thwaites[162], at one time superintendent of the botanical garden at Peradeniya in Ceylon, published a notable paper on lichen gonidia in which he pointed out that as in _Collema_ the green constituents of the thallus resembled the chains of _Nostoc_, so in the non-gelatinous lichens, the green globose cells were comparable or identical with _Pleurococcus_, and Thwaites further observed that they increased by division within the lichen thallus. He insisted too that in no instance were gonidia reproductive organs: they were essential component parts of the vegetative body and necessary to the life of the plant. In a further paper on _Chroolepus ebeneus_ Ag., a plant consisting of slender dark-coloured felted filaments, he described these filaments as being composed of a central strand which closely resembled the alga _Chroolepus_, and of a surrounding sheath of dark-coloured cells (Fig. 3): “occasionally,” he writes, “the internal filament protrudes beyond the investing sheath, and may then be seen to consist of oblong cells containing the peculiar reddish oily-looking endochrome of _Chroolepus_.” Thwaites placed this puzzling plant in a new genus, _Cystocoleus_, at the same time pointing out its affinity with the lichen genus _Coenogonium_. The plant is now known as _Coenogonium ebeneum_. Thwaites was on the threshold of the discovery as to the true nature of the relationship between the central filament and the investing sheath, but he failed to take the next forward step.