In rural Iowa, the government unveils the Thompson Harmonizer, a new super-weapon, the result of the mysterious Project X. Although he has known nothing of it, Dr. Robert Stadler finds himself being credited with its creation and coerced to speak at the unveiling event. The weapon uses sound waves to destroy all living things within its radius. Dr. Floyd Ferris convinces him it is necessary to control an increasingly hysterical population. The stunned and horrified audience watches as a farmhouse and some goats are torn to shreds by the machine, but no one comments. Wesley Mouch declares it to be a wonderful instrument of peace.
Dagny calls Rearden to tell him she is alive. When she returns to the office, she learns that the government has passed the Railroad Unification Plan. Under it, all the railroads will pool profits and distribute them according to the mileage of track each railroad maintains. Taggart stands to make a huge profit because it owns the most track. Eddie is meeting with Cuffy Meigs, the head of the Unification Board, who is in charge of the new plan. Under his orders, trains are being rerouted and used as favors for influential friends.
Jim insists that Dagny appear on a radio show that night to reassure the public that she has not deserted and that the railroads are safe. She refuses. Later, Lillian visits her and tells her that her affair with Rearden will be exposed if she does no go on the air. She agrees to appear. When she speaks on the air, she proudly tells the public about her affair with Rearden and about the blackmail used to force him to sign over the rights to Rearden Metal. When she sees Rearden later that night, he finally confesses his love for her, although he already knows he has lost her to the man she truly loves. Her speech on the radio had been delivered in the past tense. When she tells him that her love’s name is John Galt, he is astonished. He suspects where she has been.
Jim Taggart is pleased with a deal he has just arranged. Argentina has been declared a People’s State, and d’Anconia Copper will be nationalized in less than a month. Knowing this in advance, Taggart transfers his investments from d’Anconia Copper to a new company, which will control its assets after the nationalization. Aware that he will make a fortune he feels a vague desire to celebrate. He hopes that his wife, Cherryl, will give him the admiration he seeks, but she is no longer in awe of him, having realized his true nature in the year since their wedding. She has learned the true story of the John Galt Line, and suspects some terrible evil in Jim. When he drinks a toast to destroying Francisco, she leaves in disgust.
Cherryl goes to see Dagny. She offers an apology for accusing Dagny of being the weak and evil one at Taggart. She knows now it was Dagny who created all the success and Jim who was wrong. Dagny accepts her apology and offers to help Cherryl. She talks about the evil of giving to the undeserving and about the importance of justice, and Cherryl finally feels she is understood.
Back at Jim’s apartment, Lillian Rearden appears. She has come to ask Jim to use his influence to prevent Rearden from divorcing her, but he cannot help her. In a final attempt to hurt Rearden, she has emotionless sex with Jim.
When Cherryl returns, it is clear Jim has been unfaithful. He admits it and says he will never give her a divorce, and she is stuck with him. She asks why he married her. He tells her viciously that he married her because she was worthless, because he wanted her to accept his love as alms. She realizes that he really married her because she was struggling to rise above the gutter, and it was this struggle he wanted to destroy. She tells him he is a killer for the sake of killing, and he slaps her. She runs out into the street, where a social worker sees her and tells her that her despair is a result of her selfishness. This is too much to take, and she jumps off a bridge and drowns.
Project X reveals the extent to which the looters’ regime depends on sheer brute force. The monstrous machine, built using scientific principles discovered by Dr. Stadler, demonstrates what is created when the mind is used by the state for its own ends. With the machine at its disposal, the government has become a true dictatorship, able to dominate its people through threats and violence. Stadler’s willingness to participate in the unveiling marks the final collapse of his integrity. He has known nothing of the project and realizes that his name is being associated with it to make the public more accepting. At first, he is outraged at being used and horrified by the machine itself, but he does as he is told, even agreeing to read the speech prepared for him by the government. He now stands fully with the looters.
The Railroad Unification plan is another example of the absurd efforts of the government. But this time there is no effort to even hide the absurdity or pretend that the good of the nation will be served. The plan benefits only Taggart Transcontinental and the well-connected Jim Taggart, who is credited with delivering Rearden to the looters. Taggart has been using the tracks of other railroads to get around the destroyed tunnel but is not responsible for maintaining them. Meanwhile, Taggart owns more track than anyone, but most of it is unused. By crafting the plan to reward income based on amount of track owned instead of service provided, Taggart will reap huge profits. Smaller railroads will maintain the lines it is using, and its own lines will carry almost no traffic. The most successful railroad under the plan would be one that owns the most track but runs no trains at all.
Dagny’s radio address is a triumph of reason and honesty over deceit and denial. At first, she refuses to appear because to do so would imply her endorsement of the Railroad Unification Plan and would suggest the industry is not in shambles. Both would be lies. But when she learns of the blackmail used on Rearden, she welcomes the opportunity to avenge him. She is not bothered by publicly revealing her affair with Rearden. As she has said before, she is proud of it, and her own opinion is the only one that matters to her. Dagny does not believe in the separation of the mind and body that would make her physical desires base and shameful. For her, the desires of the body are connected to the rational perceptions of the mind. She and Rearden desired each other because of their respect and admiration for each other.
In stark contrast to the passion Dagny and Rearden have shared, Jim and Lillian’s encounter is tawdry and cheap. They are not motivated by respect or admiration, or even the desire for a moment’s pleasure. They are drawn to each other by their need to destroy Rearden. The only words spoken between them is Jim’s reference to Lillian as “Mrs. Rearden.” Lillian is still married to Rearden and believes she can hurt him with her infidelity. Rearden, of course, is far beyond caring, but Lillian does not know that. Finally, the picture of Jim is now complete. He is, as Cherryl accuses him, a killer for the sake of killing. He is a nihilist, seeking and enjoying the destruction of others. Although the rest of the looters are motivated by the quest for power and money, Jim does not enjoy these things the way he enjoys destroying men of integrity. His desire to celebrate the Argentinean deal has less to do with the fortune he stands to make than with the prospect of Francisco’s ruin. Throughout his life, he has been driven to destroy the strong, capable people around him. Unable to accomplish his goal, he has chosen Cherryl as a substitute, because she is easier to destroy.
In Cherryl Brooks, Rand presents a true victim. Cherryl endures a profound transformation, from worshipping the best in people and believing she has found it in Jim, to comprehending evil in its purest form. When she sees Jim laid bare as the killer he is, she finds herself trapped. Though Dagny can offer her a brief refuge from the evil, she has no form of escape, either from her marriage or ultimately from the society in which Jim’s values prevail. Her suicide is her way out, just as withdrawal from the looters’ world is the strikers’ way out.