Orren Boyle of Associated Steel, Jim Taggart, Paul Larkin, and Wesley Mouch (who is Rearden’s lobbyist in Washington) sit in a bar in “casual” conversation. Boyle is complaining that his company has been dropped by Taggart Transcontinental in favor of Rearden, who has the advantage because they own mines as well as factories. Taggart promises to get laws passed so that Rearden will lose his mines. Boyle is pressured to get his friends to push out Dan Conway of Phoenix-Durango, which has presented stiff competition to Taggart. Mouch sits silently, but Taggart promises to find him a job in Washington if he will stay silent about these plans. Taggart asks about the San Sebastian Line, which is serviced by one wood-burning train a day. Boyle says that the rumors of the rail lines being nationalized are not true and that he has a two-hundred-year deal with the Mexican government.

Dagny had known at the age of nine that she wanted to run the railroad company. At sixteen, she began working as a night operator for one of the stations. She gradually pushed her brother’s friends out of the way to be made Vice-President of Operations, a position that she sincerely craved. Taggart asks her why she is running shoddy engines on the San Sebastian Line. Dagny replies that she is moving as much valuable property out of Mexico so that when the lines are nationalized, there will not be anything worthwhile to loot. Dagny had been against this line from the beginning, but her brother had been manipulated by Francisco d’Anconia (a wealthy Argentinean businessman/playboy) into building it for access to d’Anconia’s copper mines in Mexico. However, the mines have not yet produced any copper. Taggart says that the lines were built to encourage industry among the Mexican people. Dagny replies that they are not industrious and are costing Taggart Transcontinental daily. When Dagny leaves, she stops to talk to the old news vendor, who discusses the changes that he has seen over the years. He shrugs it all off by asking, “Who is John Galt?” Dagny is irritated by the question for some reason.

Eddie Willers eats in the company cafeteria. He speaks with a work-strained laborer, complaining about the decay of the world, as well as the railroad. They discuss the Rio Norte Line, which Eddie believes is the company's last hope. He is counting on Dagny to repair the line back to a condition worthy of a Taggart train. He tells the worker that the only thing that Dagny loves outside of the company is the music of Richard Halley.