Yeh definitely Sauron generated more fear than Morgoth did but only in the 3rd age. Sauron is more crafty and sly than his master is because in the First Age Morgoth's strength was sufficient to see him prevail over the princes of the Noldor. This remained true in the second age because in it, he still had to contend with the kingdom of Lindon, Lothlorien, as well as the remnants of Numenor, after the fall (which was great).
However in the 3rd Age Sauron subdued his enemy with fear, not without reason because by that time the Dunedain of the North were waning (I mean come on! Halbarad could only summon 20 to the Pelennor Fields!) the Elves were departing from Middle Earth and the Dwarves had dwindled over the years because of war and the plain fact that most of them werent getting any, to put it crudely :P
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