Although public opinion and an incompetent contractor are working against them, Dagny and Rearden build the Rio Norte Line. Rearden designs an innovative bridge for the line that takes advantage of the properties that his new metal possesses. The State Science Institute, a government research organization, tries to bribe and threaten Rearden to keep his metal off the market, but he won't give in. The Institute then issues a statement devoid of factual evidence that alleges possible weaknesses in the structure of Rearden Metal. Taggart stock crashes, the contractor quits, and the railroad union forbids its employees to work on the Rio Norte Line. When Dr. Robert Stadler, a brilliant theoretical scientist in whose name the State Science Institute was founded, refuses to publicly defend Rearden Metal even though he knows its value, Dagny makes a decision. She tells her brother that she will take a leave of absence, form her own company, and build the Rio Norte Line on her own. She signs a contract saying that when the line is successfully completed, she'll turn it back over to Taggart Transcontinental. Dagny chooses to name it the John Galt Line in defiance of the general pessimism that surrounds her.
Rearden and the leading businessmen of Colorado invest in the John Galt Line. Rearden feels a strong sexual attraction to Dagny but, because he regards sex as a demeaning impulse, doesn't act on his attraction. The government passes the Equalization of Opportunity Bill that prevents an individual from owning companies in different fields. The bill prohibits Rearden from owning the mines that supply him with the raw materials he needs to make Rearden Metal. However, Rearden creates a new design for the John Galt Line's Rearden Metal Bridge, realizing that if he combines a truss with an arch, it will enable him to maximize the best qualities of the new metal.
