The weakened position of its allied company pulled the Reading down, and prevented it from attaining the secure position which had seemed in sight. The payment of dividends only increased the general dissatisfaction. In February, 1889, holders of a considerable amount of second preference bonds circulated a petition objecting to the official statement of net earnings applicable to these securities, and demanded an examination of the books. After an investigation their expert declared that a 7½ per cent dividend had been earned, but the bondholders could not induce the company to increase its distribution. The next year preference bondholders fared even worse. The managers declared that the surplus over all fixed charges for the year was barely $100,000, and that no dividends at all upon their holdings could be paid. Again an investigation was demanded and accorded, and Mr. Howard Lewis, the expert appointed, reported that there was applicable to the payment of interest upon first preference bonds the sum of $90,101, or ⅜ of one per cent; a sum which the company promptly agreed to pay. Meanwhile even the stockholders were becoming restless. In June, 1889, a suit was commenced in Philadelphia, praying that the company’s voting trustees and the trust under which they acted should be set aside, on the ground that the trust was to be exercised by five voting trustees, whereas only four had ever been appointed. Later on the matter was taken up by London stockholders, and became serious enough to force a concession of two seats in the board of managers of the company. There was no question but that the trouble was caused by depression in the anthracite coal business, for in the carriage of both passengers and freight the Reading in these years made steady and substantial gains. In the three years following 1887 the number of passengers transported increased by 2,400,000 and the earnings from them by $470,000; while the freight tons moved gained 1,500,000 and the freight earnings $1,000,000. Only in coal was there a decrease, which appeared for the Coal & Iron Company in the figures for sales and gross and net receipts, and for the Railroad Company in the earnings from anthracite transported. The result was an attempt to improve the situation: first, by a combination among coal producing roads which should raise the selling price of that commodity; and second, by extension of the railroad into new markets, whereby an outlet for increased production should be obtained. At the instigation of Mr. Gowen a syndicate was formed to purchase a majority of the stock of the Reading Company,[234] which bought much more than 50 per cent, even though Mr. Gowen, the prime mover, died in the mean time. The existing managers showed no desire to combat the movement, although the voting power lay entirely in their hands. In June, 1890, President Corbin resigned, and Mr. A. A. McLeod was elected in his place.