Eddie Willers, special assistant to the vice president in charge of operations of Taggart Transcontinental Railroad, is accosted by a bum on the streets of New York City, who asks him, “Who is John Galt?” The question is an expression of futility—a slang phrase that indicates a hopeless situation. Eddie doesn’t like the question, just as he doesn’t like to see shops closing along Fifth Avenue and other previously prosperous streets. He is troubled by the steadily declining revenues of the railroad and the diminishing industrial output of the country in general.
Eddie speaks to James Taggart, president of the railroad, regarding the desperate condition of the track on their Rio Norte Line that serves Colorado, the last state whose industrial production is booming. He reminds Jim that Colorado—the home of Ellis Wyatt, whose discovery of a new method of extracting oil from shale rock led to the boom—is vital to the country’s survival and can’t be left without transportation. Taggart Transcontinental needs new rail now. Jim says that his friend Orren Boyle, the head of Associated Steel, has experienced unavoidable delays in the production of his rail and can’t be blamed. Eddie says that Hank Rearden of Rearden Steel, the last great steel producer in the country, can provide the rails. Taggart refuses to consider Eddie’s proposition.
Jim’s sister and Eddie’s boss, Dagny Taggart, returns from a trip to examine the Rio Norte Line. Dagny found the line in worse shape than she expected. She tells Jim that she has cancelled the order with Associated Steel and placed it with Rearden. Dagny has ordered rail made not of steel but of a new product, Rearden Metal. Jim objects on the grounds that the new metal has never been tried before and hasn’t been approved by public opinion. Dagny, who studied engineering in college, tells him that she has seen Rearden’s formula and tests, and she’s convinced that Rearden’s invention is superior to steel. Dagny also says that she’ll use Rearden Metal to rebuild the Rio Norte Line and win back shippers from Dan Conway’s superb Phoenix-Durango Railroad, which now carries most of Colorado’s freight traffic. She’s determined to save the railroad from the consequences of Jim’s policies, especially his construction of the worthless San Sebastian Line which, she asserts, the socialist Mexican government will imminently nationalize.
Other things besides her brother’s destructive policies disturb Dagny. For example, she wants to promote Owen Kellogg, an efficient employee of the Terminal Division, but he quits and leaves the railroad industry entirely. Furthermore, Dagny heard a young brakeman on her returning train whistling a theme that sounded like a composition of Richard Halley, the composer whose works she loves. But Halley retired suddenly eight years ago and disappeared. When she questioned the brakeman regarding the new piece, he replied that it was Halley’s Fifth Concerto. After she reminded him that Halley wrote only four, he became evasive. Dagny calls the company that publishes Halley’s music and finds that he hasn’t written a new piano concerto.
