Observations of the distribution in space and velocity of gas clouds, together with considerations of dynamical astronomy, suggest that the total mass density near the galactic plane is appreciably higher than the observed density of visible stars and atomic hydrogen gas. The distribution of K giant stars is compatible also with a high density of "invisible" mass, and it is suggested here that this is contributed by molecular hydrogen gas. Radii of spheres for 0 and B stars are evaluated, and the average rates of dissociation and ionization of molecular hydrogen, due to random encounters of gas clouds with bright stars, are calculated. Using the rates for the association of hydrogen molecules on the surfaces of dust grains, calculated in the preceding paper, the mean equilibrium abundance ratio of molecular to atomic hydrogen is calculated. This ratio is found to be almost independent of the height above the galactic plane and to lie in the range 0.1-10. The effect of molecular hydrogen on the harmonic mean temperature of gas clouds is discussed.