The localization of the inflammatory products not only upon the surface of the air sacs but also in the stroma of the alveoli; the interlobular trabeculæ, and about the vascular channels indicates the intense effect of the virus of this disease. The exudate is largely an indication of the point of action of the irritant upon the tissues, and in influenza with its variety of bacteria in the lung this is not limited to the surface membrane of the air sacs. During this second stage of the reaction the purulent exudate was found occupying all structures of the involved area. Damage upon the component tissues was to be seen in the endothelium of the capillaries, the muscle tissue of the bronchioles and arterioles, the connective tissues and the epithelium. It was seldom that bacteria were demonstrated in the interstitial parts, and it would appear that the damage was the result of their toxins. Hence, broadly speaking, the end result of the pneumonic process in influenza is far more complex and indefinite than that in lobar pneumonia. Resolution may take place early with the clearing up of the first products of the exudate; or it may be delayed in association with the secondary purulent process which not uncommonly occupies multiple lobes. Where the resolution begins in purulent regions the final outcome is most variable, depending upon the amount of damage which has been imposed upon the lung tissue during the suppurative inflammation, ending either in complete restoration or slight fibrosis of the lung, or passing on to focal scarring of various degrees, sufficient to alter the pulmonary capacity. In other instances the resolution is delayed by the development of abscess, infarct and gangrene. Here the final outcome is determined by the amount of tissue involved in the destructive process, and the persistency with which the infecting micro-organisms attack the local tissues and the constitutional resistance of the individual. Those individuals in whom resolution begins before there is much purulent pneumonia stand the best chance of having the lung return to its normal characteristics. _Pleura_