Not uncommonly this stage of inflammatory œdema was accompanied by various grades of hemorrhage, varying from the presence of small aggregations of red cells to a complete flooding of the lung tissue making it look not unlike a red infarct of lung, save that the alveolar walls still showed an active circulation and living cells. It was remarkable that even though there was such an intense reaction taking place in the lung tissue there was little or no evidence of a cellular exudate during this stage of the process. Where much blood was extruded into the alveoli occasional fibrin threads were found in the coagulum. In these early cases the bronchicles and small bronchi were found to contain an exudate similar to that in the alveoli. Not uncommonly the vessels from which the red blood was escaping, could be demonstrated in sections. The appearance of the vascular wall suggested that a definite opening had occurred in the side of the capillary from which the blood escaped. We were not able to demonstrate a fatty or other type of degeneration in the cells of the capillary walls. It is probable that the process of injury was much too acute to permit of the demonstration of the products of degeneration within the surviving cells. The hemorrhagic lesions which had existed for a longer period of time gradually showed a varying infiltration by wandering cells. The earliest cells not belonging to those of the hemorrhage or œdema appearing within the alveoli were mononuclear elements partly arising from the alveolar walls and partly coming from the circulation. Numerous mononuclear cells of epithelial type desquamating from the inner surface of the alveoli accumulated in the œdematous fluid and the hemorrhage within a short time after their occurrence. These cells either appeared in clusters or as single elements. Accompanying this were also large mononuclear cells loaded with different quantities of pigment which had apparently escaped from the lymphatic channels within the alveolar walls. These latter cells belong to the wandering endothelial type which are active in phagocytosis for foreign material and which assist so largely in inducing the deposit of carbon in the lungs and lymph glands. A third mononuclear cell appearing early in the reaction was the lymphocyte. The numbers and extent of distribution of this cell were not constant. We have seen it in some of the reactions where very few leucocytes were to be seen, and where it constituted the main infiltrating cell of the alveolar wall or the air sacs. We have previously mentioned its presence in the inflammatory reactions of the bronchi. Here we find it in the early response within the lung tissue and appearing amidst a reaction which is intensely acute. It is not long after the finding of these various cell elements that the polymorphonuclear leucocyte wanders in large droves to numerically overshadow the mononuclear cells. Nevertheless, the three types above mentioned can be recognized in the