1. The Golgi controversy as it applies to the nerve cells of Locusta is discussed with reference to the recent publications of Beams and others (1953) and Gatenby and others (1953). Further support has been obtained for the view that the ‘Golgi’ appearances are produced by reactions at the surface of the lipochondria.

2. Cytoplasmic inclusions during the differentiation and growth of the nerve cells are described. The early germ-band cells have two categories of inclusions--mitochondria (granular and filamentous) and lipochondria (osmiophil bodies). The neuroblasts and early ganglion-cells possess only granular mitochondria. The filamentous mitochondria and lipochondria appear again in the growing neurones, so that at the time of hatching of the embryo the nerve cells have attained the full development of their cytoplasmic inclusions. Thus, Gatenby's three-phase theory for nerve cells does not apply to Locusta.

3. It is concluded that the lipochondria and filamentous mitochondria are not necessarily self-reproducing bodies.

4. Masson's technique shows granules staining red with acid fuchsin in the growing neurones as well as in the different stages of the adult. These are shown to be lipochondria. No secretory cycle could be detected.

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