At his trial, Rearden states that he doesn't recognize his deal with Danagger as a criminal action and, consequently, doesn't recognize the court's right to try him. He says that a man has the right to own the product of his effort and to trade it voluntarily with others. The government has no moral basis for outlawing the voluntary exchange of goods and services. The government, he says, has the power to seize his metal by force, and they have the power to compel him at the point of a gun. But he won't cooperate with their demands, and he won't pretend that the process is civil. If the government wishes to deal with men by compulsion, it must do so openly. Rearden states that he won't help the government pretend that his trial is anything but the initiation of a forced seizure of his metal. He says that he's proud of his metal, he's proud of his mills, he's proud of every penny that he's earned by his own hard work, and he'll not cooperate by voluntarily yielding one cent that is his. Rearden says that the government will have to seize his money and products by force, just like the robber it is. At this point, the crowd bursts into applause. The judges recognize the truth of what Rearden says and refuse to stand before the American people as open thieves. In the end, they fine Rearden and suspend the sentence.
Because of the new economic restrictions, the major Colorado industrialists have all retired and disappeared. Freight traffic has dwindled, and Taggart Transcontinental has been forced to shut down the Rio Norte Line. The railroad is in terrible condition: It is losing money, the government has convinced James Taggart to grant wage raises, and there is ominous talk that the railroad will be forced to cut shipping rates. At the same time, Wesley Mouch is desperate for Rearden to cooperate with the increasingly dictatorial government. Because Rearden came to Taggart's wedding celebration, Mouch believes that Taggart can influence Rearden. Mouch implies that a trade is possible: If Taggart can convince Rearden to cooperate, Mouch will prevent the government from forcing a cut in shipping rates. Taggart appeals to Lillian for help, and Lillian discovers that Dagny Taggart is her husband's lover.
