This section is from the book "A Manual Of Pathological Anatomy", by Carl Rokitansky, William Edward Swaine. Also available from Amazon: A Manual of Pathological Anatomy.
Nerves, just like other parts, are liable to incised and punctured wounds, to contusion, stretching, laceration, etc. A clean cut affords the best prognosis; especially when the ends of the nerve are secured against contact with the atmosphere, and pressure from excessive inflammatory tumefaction of other soft parts which may have been wounded at the same time; and when it is not irritated by foreign bodies, inflammatory products, etc. The process by which such wounds are healed and the nerve restored, have been studied both in man, and, by experiments, on animals. (J. Müller, and Sticker, Steinrück, Nasse, Günther, and Schön).
After a nerve has been divided, its extremities retract a little, and some of the medulla is pressed out by the contractile neurilemmatous sheath. Inflammatory injection and reddening then ensue, with some swelling, which fills out particularly the looser cellular sheath of the fasciculi. Hence the fasciculi which compose each nervous cord are forced asunder at the divided extremity; and when exudation takes place, their separation is still more marked. The exudation is poured as well into the tissue of the neurilemmatous sheaths of the nerve, as into the space between its two ends; and coagulating there, it forms a gelatinous, yellowish-red mass, which reunites the divided portions, and mixes with the exudation furnished by the adjoining tissues which have been wounded at the same time. In this exudation nuclei and cells then form, and the regeneration of the nerve takes place. After some time, fibrils are perceived in the exudation, which advance towards each other, from the nerve-tubes of the two extremities; they are most distinct near the end of the nerve, and are least developed in the middle of the exudation-callus. After a still longer time, complete nerve-tubes present themselves in the callus, which appear on the whole smaller than the original tubes (Nasse); but some years later, old and new tubes can be no longer distinguished from one another. A different portion of the exudation serves for the regeneration of the neurilemma; whilst yet another portion remains behind, an unorganized (gestaltloses) blastema, and produces a nodular swelling of the new-formed piece. This nodule is generally largest at the upper extremity of the nerve, and does not disappear for a very long period. An adhesion forms between it and the cicatrix of the neighboring tissue; and this, too, may be equally permanent, or it may be loosened by absorption.
From the complete restoration of the function of the nerve, at least in all its material relations, it may be inferred that, most remarkably, in most, if not all, instances the proper primary filaments reunite. Sometimes this is not the case, as may be seen by anomalies in their direction; filaments alike in kind are united, but not those which properly belong to each other. Dissimilar nerves and filaments, such as motor and sensitive, seem never to unite with one another, at least their doing so is very questionable. (Bidder).
Of course, the difficulties in the way of this regenerative process are enhanced by any loss of the substance of the nerve.
If no regeneration takes place, the primary filaments waste, especially those in its distal portion, and the whole nerve gradually acquires a grayish-red or gray aspect. In the other extremity these changes are confined to a certain tract, and to particular primary filaments.
The ends of the nerves divided in amputations swell out, and for the most part unite together in one common hard knot, with which the cicatrix of the neighboring soft parts also coalesces. If there be not soft parts enough to preserve the knot from pressure, or if the soft parts pull upon it, symptoms not unfrequently arise which may be so severe as to require that the nerves should be divided again.
Even the peripheral nervous bodies (ganglion-cells) appear to be capable of regeneration. (Valentin's Physiology).
 
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