The olfactory system comprises three major parts: the olfactory epithelium, which contains olfactory sensory neurons in direct contact with the environment; the olfactory bulb, which integrates input from the olfactory sensory neurons; and the olfactory cortex, which processes input from the olfactory bulb is processed and transmitts information to other structures in the brain.
By observing the positions of the axons and dendrites in relation to each other, Cajal was able to infer the direction of the flow of information in the olfactory system (represented above by arrows) from the periphery of the body to deeper brain structures, nicely illustrating his Law of Dynamic Polarization.
Cajal also noted that some information was transmitted back from the cortex to the bulb; he named this bidirectional information flow “centrifugal input”.
The drawing above shows several olfactory sensory neurons (A) forming synapses with a single glomerulus cell in the olfactory bulb (B); in fact, olfactory sensory neurons expressing the same odorant receptor do converge on a pair of glomeruli cells, which integratethe multiple inputs before sending the signal onwards.
The olfactory sensory neurons are not necessarily spatially close, but Cajal seems to have found a lucky grouping in this drawing, illustrating again his talent for capturing structures with future significance.