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The reconstruction of the Rio Norte Line is plagued with problems, but Dagny and Rearden manage to keep the project on schedule through quick and decisive actions. Ellis Wyatt appears at the Rio Norte construction site, where he has been helping out behind the scenes. His appreciative tone with Dagny acknowledges that she is as driven and focused as he is. Dagny is relieved to also find Rearden at the site. He proposes replacing an old bridge in Colorado with one made entirely of Rearden Metal. Dagny approves his bold plan.
Back in New York, Dagny orders a cup of coffee at a diner. A man sitting next to her complains that there is no human spirit, that men are concerned only with satisfying their bodies’ needs. Another man shrugs off the importance of morality. “Who is John Galt?” he says with a sneer. At this, a small, shriveled tramp declares that he knows. John Galt was a great explorer who found the fountain of youth.
Dr. Potter, from the State Science Institute, comes to see Rearden and tells him that society is not ready for Rearden Metal. He says that Rearden’s company might harm his competitors by producing too much and asks Rearden to wait a few years before producing his metal. When Rearden refuses, Potter offers to buy all rights to his metal, at any price. Rearden refuses. Potter tells him that there are certain bills pending in the legislature that make businessmen particularly vulnerable. The threat is clear. Later, the State Science Institute issues a formal warning about Rearden Metal. The statement lacks any scientific basis but hints at possible dangers. In response to the denunciation, Taggart stock crashes; Ben Nealy, the Taggart contractor, quits; the Brotherhood of Road and Track Workers forbids its members to work with the metal; and Jim leaves town.
Visiting the State Science Institute in New Hampshire, Dagny finds that Dr. Stadler, at one time the greatest scientist in the country, is completely disillusioned. He agrees that the metal is a great discovery but says the Institute will not support it. Despite spending millions, the Institute’s metallurgists have failed to discover anything as valuable, and they are afraid to draw attention to the fact that a private citizen succeeded where a government-funded institution failed.
When Dagny finds Jim, he is desperate. He wants to save the railroad but has no idea what to do. Dagny tells him she will finish the line on her own. Because everyone is afraid of Rearden Metal, she will resign and start her own company. After she proves that the metal works, she will return to Taggart and bring her line with her. She will name her company the John Galt Line. Dagny goes to Francisco d’Anconia for money, but he refuses to help and expresses shock at her name for the line. Dagny finds the investors she needs among the industrialists of Colorado. Rearden also invests.
The Legislature passes the Equalization of Opportunity Bill, which will force Rearden to give up his mines. Wesley Mouch had not informed Rearden that the bill was being considered, and he cannot be reached by phone.