Due to the loss of copper, Rearden Steel is not able to fulfill its orders for the first time in its history. Without the steel, the railroad lines cannot be rebuilt and repaired. Without the railroads, goods cannot be delivered. Without the goods, businesses fail. The country sinks into starvation and depression. The Rio Norte Line has very little business even though it has the most stable line. Colorado, where the line is located, suffers more than any other place in the country.

The Taggart Transcontinental Board of Directors holds a meeting to discuss the situation. When it appeals to Dagny, she claims to have no opinion and no proposal to save the company. She points out that the decisions previously made by the board have resulted in the chaos. They did not listen to her then, so she refuses to participate in the discussion now. In the end, the decision is made to close the Rio Norte Line and use the rails to repair the transcontinental line, which is the more crucial line of the two. To get the permits from Washington, however, James Taggart has to make some deals with Wesley Mouch.

Dagny sees Francisco d’Anconia waiting for her in the lobby as she leaves the board meeting. D’Anconia questions her motives for remaining with a company that does not appreciate her. Dagny tells him she would do anything to keep the company together.

James Taggart continues to make deals with the government, which is trying to deal with the worsening economic failings of the country. With the anticipation of a new law, James is asked find a way to hold Rearden off. James calls Lillian and asks to meet her for dinner in New York. When James explains the situation to her, Lillian agrees to find something that will aid the government in working around Rearden, who has become a legendary figure in public opinion. She decides to meet Rearden at the train station. When she learns that he does not have a compartment, she realizes that he is most likely with his mistress. Lillian sees Dagny Taggart disembark and realizes that Dagny is Rearden’s mistress. She is shocked, and Rearden notices this when he meets her. She cannot conceal her feelings and demands that he give up Dagny. Rearden refuses. Lillian can either divorce him or keep up the sham of their marriage as they have been doing, but he will not leave Dagny. Bitterly, Lillian agrees.