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.
In response to devastating economic conditions, the government passes the radical Directive 10-289, which requires that all workers stay at their current jobs, all businesses remain open, and all patents and inventions be voluntarily turned over to the government. When she hears the news, Dagny resigns from the railroad. Rearden doesn’t resign from Rearden Steel, however, because he has two weeks to sign the certificate turning his metal over to the government, and he wants to be there to refuse when the time is up. Dr. Floyd Ferris of the State Science Institute comes to Rearden and says that the government has evidence of his affair with Dagny Taggart and will make it public—dragging Dagny’s name through the gutter—if he refuses to sign over his metal. Rearden now knows that his desire for Dagny is the highest virtue he possesses and is free of all guilt regarding it, but he’s a man who pays his own way. He knows that he should have divorced Lillian long ago and openly declared his love for Dagny. His guilt and error gave his enemies this weapon. He must pay for his own error and not allow Dagny to suffer, so he signs.
Dagny has retreated to a hunting lodge in the mountains that she inherited from her father. She’s trying to decide what to do with the rest of her life when word reaches her that a train wreck of enormous proportions has destroyed the famed Taggart Tunnel through the heart of the Rockies, making all transcontinental traffic impossible on the main track. She rushes back to New York to resume her duties, and she reroutes all transcontinental traffic. She receives a letter from Quentin Daniels telling her that, because of Directive 10-289, he’s quitting. Dagny plans to go west to inspect the track and to talk to Daniels.
On the train ride west, Dagny rescues a hobo who is riding the rails. He used to work for the Twentieth Century Motor Company. He tells her that the company put into practice the communist slogan, “From each according to his ability, to each according to his need,” a scheme that resulted in enslaving the able to the unable. The first man to quit was a young engineer, who walked out of a mass meeting saying that he would put an end to this once and for all by “stopping the motor of the world.” The bum tells her that as the years passed and they saw factories close, production drop, and great minds retire and disappear, they began to wonder if the young engineer, whose name was John Galt, succeeded.
On her trip west, Dagny’s train is stalled when the crew abandons it. She finds an airplane and continues on to Utah to find Daniels, but she learns at the airport that Daniels left with a visitor in a beautiful plane. Realizing that the visitor is the “destroyer,” she gives chase, flying among the most inaccessible peaks of the Rockies. Her plane crashes.
Dagny finds herself in Atlantis, the hidden valley to which the great minds have gone to escape the persecution of a dictatorial government. She finds that John Galt does exist and that he’s the man she’s been seeking in two ways: He is both the inventor of the motor and the “destroyer,” the man draining the brains of the world. All the great men she admires are here—inventors, industrialists, philosophers, scientists, and artists. Dagny learns that the brains are on strike. They refuse to think, create, and work in a world that forces them to sacrifice themselves to society. They’re on strike against the creed of self-sacrifice, in favor of a man’s right to his own life.
Dagny falls in love with Galt, who has loved and watched her for years. But Dagny is a scab, the most dangerous enemy of the strike, and Galt won’t touch her—yet. Dagny has the choice to join the strike and remain in the valley or go back to her railroad and the collapsing outside world. She is torn, but she refuses to give up the railroad and returns. Although Galt’s friends don’t want him to expose himself to the danger, he returns as well, so he can be near at hand when Dagny decides she’s had enough.
When she returns, Dagny finds that the government has nationalized the railroad industry and controls it under a Railroad Unification Plan. Dagny can no longer make business decisions based on matters of production and profit; she is subject to the arbitrary whims of the dictators. The government wants Dagny to make a reassuring speech to the public on the radio and threatens her with the revelation of her affair with Rearden. On the air, Dagny proudly states that she was Rearden’s lover and that he signed his metal over to the government only because of a blackmail threat. Before being cut off the air, Dagny succeeds in warning the American people about the ruthless dictatorship that the United States government is becoming.
Because of the government’s socialist policies, the collapse of the U. S. economy is imminent. Francisco d’Anconia destroys his holdings and disappears because his properties worldwide are about to be nationalized. He leaves the “looters”—the parasites who feed off the producers—nothing, wiping out millions of dollars belonging to corrupt American investors like James Taggart. Meanwhile, politicians use their economic power to create their own personal empires. In one such scheme, the Taggart freight cars needed to haul the Minnesota wheat harvest to market are diverted to a project run by the relatives of powerful politicians. The wheat rots at the Taggart stations, the farmers riot, farms shut down (as do many of the companies providing them with equipment), people lose their jobs, and severe food shortages result.
