Eddie shows Dagny the newspaper article that describes the rage of the Mexican government when they discovered that the San Sebastian mines that they had seized were worthless. She tells Eddie to call d’Anconia for a meeting. Eddie reminds her that this is “Frisco d’Anconia,” her former lover. Dagny is not concerned.

Dagny reflects on her childhood with Francisco. The son of a wealthy Argentinean businessman, Francisco was reared all over the world so that he would feel a sense of ownership over the entire planet. Every year, he also spent time with the Taggarts. He ignored James and devoted his attention to Dagny and Eddie. Francisco admitted he liked Dagny simply because she would one day run Taggart Transcontinental.

While Francisco attends college in Ohio, he buys a decrepit copper mine, which does not please his father. After spending some time in Montana, Francisco returns to New York as the head of the branch offices there. He and Dagny become lovers, though they do not see each other often. One night, Dagny awakens and sees Francisco lying rigid as if in great pain. He tells her to prepare for what she will hear about him in the future. She is confused, but he will tell her nothing else. Over the years, Dagny hears of Francisco's playboy lifestyle and how he visibly wastes money.

When Dagny arrives at Francisco d’Anconia’s hotel room, she finds him playing marbles to expend his restless energy. She asks him why he has deliberately left the Mexican government worthless mines. She wants him to fight against the looter governments of the world, not play games with them. D’Anconia tells her that it is worse than that: he "built" a modern settlement for the prospective mine workers, but in fact the buildings and roads were worthless and would fall apart within months. He bought the mines specifically to loot investors such as James Taggart. Though he lost fifteen million dollars of his own, Francisco feels satisfaction that he deprived others of many more millions. Dagny is confused that he could be this depraved, especially against her own railroad company. It is not only the Taggarts who are harmed, but also Dan Conway (who ran the only decent railroad left) and Ellis Wyatt. He dismisses all this with the question, “Who is John Galt?” Dagny lashes out at him for using what she says is “gutter language.” He tells her that he hopes that one day she will have enough courage.