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The Council of Elrond
Somehow representatives from all the major groups living in Middle-earth have all made their way to Rivendell. Each made the trip on separate matters of business. Each of them are called to the council to represent their faction concerning the Ring of Power and the threat of invasion by Sauron and the Black Riders. Frodo is introduced to elves, dwarves, men, and others of his own Hobbit race that he does not know personally.
Elrond addresses the subject of the Ring. It seems that Sauron has declared war unless he recovers the Ring. Boromir, the high steward of Gondor, has had a dream about the Ring. In his dream, he is instructed to find the Ring, a halfling and a broken sword. Strider produces the broken sword--the one Frodo has been using. Frodo produces the Ring. And Frodo himself is the halfling. All these things reveal that Strider, or Aragorn, is the rightful heir to the throne of Gondor. Boromir and his people vow to fight Sauron.
Bilbo stands up to tell everyone how he took the Ring from Gollum. Gandalf joins in to explain how Gollum himself came to possess the ring and how it has changed him and Sauron. In the past, Gandalf ís search for knowledge has led him to many records written in the past which explain the history of the Ring and ways to recognize it.
Gandalf tells them how he captured Gollum and gave him to the elves for safekeeping. But an elf named Legolas announces that Gollum has escaped. Gandalf goes on to tell how he himself has been held captive by Sarumon, a chief wizard of his order. Unfortunately, Sarumon himself has been seduced by power. He wants the Ring and will do just about anything to get it. When Gandalf refused to tell Sarumon the whereabouts of the Ring, he was imprisoned. But an eagle saved him and that is how he came to be at Rivendell with Frodo and his companions.
The council discusses many ways of dealing with the Ring, but none seem satisfactory. Eventually they decide the best course is to let Frodo continue on his quest.
In this chapter, Tolkien has set out the history of the Ring and how it has affected Middle-earth. Though the ring has enormous influence, it remains essentially unchanged.
Another important aspect of this chapter is the concept of greater good. The council realizes that the task they must complete is dangerous and difficult, but the good of everyone is affected and so they press onward.