Dr. Robert Stadler is invited to a demonstration in a field in Iowa. Viewing stands have been constructed for the viewing. Dr. Floyd Ferris reveals Project X, which is a sonic ray weapon. He uses it to demolish a farmhouse and some goats. The crowd is horrified, as is Dr. Stadler, whose research has been used to build this weapon. He points out that the world is at a standstill because of the economic crisis and does not have the resources to wage war. Dr. Ferris says the weapon is for maintaining internal peace, to control American citizens who are threatening the security of the government.
Dagny finds a small-town reporter and tells him to publish the news that she is alive and on her way back to New York. When she returns she calls Rearden, who is still in the Rocky Mountains trying to find the wreckage of her plane so he can retrieve her body. She learns from Eddie Willers that the government has passed a Railroad Unification Plan, in which the government will control all railroads and the profits shared out equally among the different railroad companies according the mileage each company maintains. Because Taggart Transcontinental owns the most track, it stands to make the largest profit. The trains are being rerouted to do favors for friends of government officials.
James Taggart tells Dagny that she will appear that night on a radio program and calm the fears of the public as to the government takeover, but she refuses. Lillian Rearden arrives and orders her to appear on the program. Lillian says she was the one who convinced Rearden to sign the gift certificate giving Rearden Metal to the government, under threat of revealing his affair with Dagny. She tells Dagny she will do the same if she refuses to appear on the program. Dagny agrees.
That night on the program, she announces her two-year affair with Henry Rearden and explains that the government and others used this to blackmail both of them to accede to their demands. The microphone is cut off, and then the radio station manager announces that there has been some technical difficulty and the station will remain off the air until it is corrected.
Dagny tells Rearden that she is in love with John Galt, though it is impossible for them to be together. She does not reveal where she has been for the past month, but she tells him that John Galt is real and that he is the inventor of the motor.