Dagny visits Colorado, where the Rio Norte Line is being rebuilt. There is trouble, however, because the factory equipment is inadequate for forming material from Rearden Metal. She orders the material to be made, no matter the cost. Ellis Wyatt has been working on the site, a sign that he has forgiven Dagny. When Hank Rearden appears, he suggests that the bridge, which has been judged to be too expensive to replace, should be repaired instead with Rearden Metal. Dagny agrees, grateful for Rearden’s partnership. She asks him for a ride in his plane back to New York, but he tells her that he is going to Minnesota. When she goes to the airport, the attendant tells her that no flights are available for two days. He also expresses his regret that she did not catch a flight with Rearden on his plane, since he is going to New York that night.

On the way to a dinner, James Taggart and Dagny discuss the public's distrust of Rearden Metal. Dagny decides to skip the dinner and gets out the car, walking along a run-down section of New York. She stops at a diner, where a tramp tells her that men are just animals without dreams or hope. A young man agrees, stating, “Who is John Galt?” The tramp claims to know John Galt, that he was an explorer who found the fountain of youth.

Dr. Potter of the State Science Institute meets with Henry Rearden. Potter asks Henry to take Rearden Metal off the market. Rearden questions Potter, asking if he thinks that the metal is faulty. Dr. Potter refuses to commit to a definite answer: he says that if the metal is faulty, it is a public menace; if the metal is good, it is a social menace. He tells Rearden that he cannot allow a company to be too successful at the expense of other companies. He offers to buy the company with government money. Rearden refuses, and the State Science Institute issues a warning against using Rearden Metal. Taggart Transcontinental stocks crash, and unions forbid their laborers to work on the Rio Norte Line.

Dagny visits Dr. Stadler of the State Science Institute, who says that he is impressed with Rearden Metal but will not go on record publicly with his opinion. He tells Dagny of three former students: Francisco D’Anconia, Ragnar Danneskjold (who is currently upsetting the world through piracy), and one other who disappeared into mediocrity.

Dagny tells her brother that in order to save the company, she will take a leave of absence and build the Rio Norte Line on her own. When she is finished, she will transfer it back to Taggart Transcontinental. She will call it the John Galt Line. She goes to D’Anconia to ask him to buy eight million dollars worth of bonds to help finance the line, but he refuses.

Congress passes the Equalization of Opportunity Bill, which will kill competition and force Rearden to break up his holdings. He discovers a new type of construction that will make the bridge on the Rio Norte Line stronger and cheaper.