Thus was the Richmond & West Point Terminal Company saved, and the principal railroads east and west of the southern Appalachians still kept under common control. The new grouping was weaker than the old, however, in that it did not include the Coast Line railroads. It was also imperfect as regards the nature of the control possessed over the East Tennessee, Virginia & Georgia. It has been said that the Richmond Terminal held a majority of the first preferred stock of this latter road.[327] By the terms of the Tennessee reorganization of 1886 this stock was to have the right for five years to elect a majority of the directors, unless before that time it should have received 5 per cent dividends for two successive years. This gave control to the Terminal Company; but it plainly made a control precarious which rested, as this did, on ownership of first preferred alone. In 1887 4 per cent was paid in dividends, and in 1888 5 per cent. In 1888, accordingly, a lease was drawn up, and the Richmond & Danville took the operation of the road for ninety-nine years. For four years it agreed to pay over 33⅓ per cent of the gross earnings; for five years more 35 per cent; and so on until 37 per cent should be reached. And, further, it guaranteed that the percentage allowed should be sufficient to pay all the East Tennessee’s fixed charges, including 5 per cent annually on the first preferred shares outstanding.[328] It cannot be denied that the ethics of the Tennessee’s lease were questionable. The East Tennessee reorganization had invested the first preferred stock of that company with temporary authority. To use this to bind the property for years to come was neither fair to the other stockholders, nor in accordance with the spirit of the reorganization plan. We need not, therefore, be surprised at the prompt application for an injunction and for the appointment of a receiver which occurred.[329] In a circular to the second preferred and junior stockholders the opponents of the lease urged that its consummation would constitute an abuse of power on the part of the existing board; that it was entirely in the interests of the first preferred stockholders; that under no circumstances could the junior stockholders derive any income from the lease; that it failed to provide other safeguards and was in many respects improvident and imperfect. In one suit before State Chancellor Gibson at Knoxville, Tennessee, emphasis was laid on the statutory prohibition of the consolidation of competing lines. In another, petition was even made that the holders of the first preferred stock be enjoined from electing a majority of the board of directors at the approaching meeting.[330] Chancellor Gibson handed down two vigorous opinions. He refused to enjoin the voting of the first preferred stock, on the ground that the plaintiffs had been in possession for two years of stock certificates which bore on their face