exudate through the succeeding stages of reactions in the lung. The large macrophage shows its phagocytic properties in taking up numerous red blood cells, lymphocytes and occasional leucocytes. It is not difficult to demonstrate that the inflammatory reaction within the bronchi and bronchioles precedes the responses within the alveoli. Quite often one may find an acute bronchiolitis with desquamation of the lining epithelium and the early serous exudate lying amidst the lung parenchyma unaffected by any irritant and reaction. There is every evidence that the bacteria reach the lung tissue by extending along the walls of the respiratory tubes and eventually reaching the air sacs either in the distant extremities of the bronchioles or when they have arrived at the thin-walled structures extend through them into the neighboring air sacs. It is during this early period that we are able to observe the characteristics of the initial inflammatory exudate as we have described it above. The serous exudate and the infiltration by mononuclear cells appear early while the absence of fibrin also attracts attention. In place of fibrin there appeared in a certain number of cases a peculiar material of a hyaline nature which becomes plastered against the borders of the air sacs forming a fairly thick laminated structure and within which thread-formation is not to be seen. Occasionally a few cells lie within this hyaline substance. Some have referred to this as a type of fibrin. We have found, however, that it does not give the staining reactions for fibrin and does not appear to be of the same composition. These masses are tightly welded to the alveolar walls and the borders are often indistinguishable. In part this material appeared to be made up of necrotic cells of the septum which previously had suffered œdema and circulatory interference. We have found in a number of cases hyaline thromboses of the fine capillaries with more or less necrosis of the alveolar septum. At times the septum was entirely destroyed so that a thick hyaline mass alone separated neighboring air sacs. This hyaline necrosis resembles in part the superficial necrosis which was observed along the borders of the denuded bronchi. There is, however, more than necrosis of cells constituting this deposit for the bulk of material eventually deposited is much greater than could arise from tissue cells alone. These hyaline masses have never been found to lie upon the alveolar wall with an intact lining, but it is always accompanied by a loss of the lining cells and more or less destruction of the wall itself. As to the nature of the hyaline deposit which is laid down in lamellae we do not know. Fibrin threads occasionally appear to arise from these hyaline deposits and extend amidst the exudate in the air sac. One cannot assume, however, that the fibrin and the hyaline material have any relation to each other as their chemical