It is always difficult to observe the entrance of the gonidia but they seem to spread first under the second or third layers of the periderm. With care it is possible to trace a filament of _Trentepohlia_ from the surface downwards, and to see that the foremost cell is really the growing and advancing apex of the creeping alga. Both symbionts show increased vigour when they encounter each other: the thallus at once develops in extent and in depth, and, ultimately, reproductive bodies are formed. In some species the apothecia or perithecia alone emerge above the bark, in others the outer peridermal cells are thrown off, and the thallus thus becomes superficial to some extent as a white scurfy or furfuraceous crust. The change from a hypophloeodal to a partly epiphloeodal condition depends largely on the nature of the bark. Frank[337] found that _Lecanora pallida_ remained for a long time immersed when growing on the thick rugged bark of oak trunks. When well lighted, or on trees with a thin periderm, such as the ash, the lichen emerges much earlier and becomes superficial. Black (or occasionally white) lines intersect the thallus and mark, as in saxicolous lichens (Fig. 41), the boundary lines between different individuals or different species. The pioneer hyphae of certain lichens very frequently become dark-coloured, and Bitter[340] has suggested as the reason for this that in damp weather the hypothallic growth is exceptionally vigorous. When dry weather supervenes, with high winds or strong sunshine, the outlying hyphae, unprotected by the thallus, become dark-coloured. On the return of more normal conditions the blackened tips are thrown off. Bitter further states that species of Graphideae do not form a permanent black limiting line when they grow in an isolated position: it is only when their advance is checked by some other thallus that the dark persistent edge appears, a characteristic also to be seen in the crust of other lichens. The dark boundary is always more marked in sunny exposed situations: in the shade, the line is reduced to a mere thread. Bitter’s restriction of black boundary lines to cases of encountering thalli only, would exclude the comparison one is tempted to make between the advancing hyphae of lichens and those of many woody fungi where the extreme edge of the white invaded woody tissue is marked by a dark line. In the latter case however it is the cells of the host that are stained black by the fungus pigment. 2. SQUAMULOSE LICHENS A. DEVELOPMENT OF THE SQUAMULE