Robert Stadler attends and sanctions a demonstration of the government’s previously top secret Project X. The project, housed in rural Iowa, is a new weapon that employs sound waves and is capable of mass destruction. Floyd Ferris convinces Stadler that the weapon is a necessary instrument of control at a time when hysteria and rebelliousness grip the American people.
Dagny returns from the valley to find the railroad in the grip of Washington’s latest dictatorial policy: the Railroad Unification Plan. The plan pools all railroad profits together and distributes income based on need rather than production. A gangster named Cuffy Meigs is the Director of Unification.
The looters want Dagny to speak on the radio and reassure the country that the railroad industry isn’t disintegrating. Initially, Dagny refuses, but Lillian Rearden visits Dagny and informs her that the rulers know of her affair with Rearden and will announce it publicly if she refuses to make the address. Dagny goes on the radio and speaks openly and proudly about her relationship with Rearden. She states that the government blackmailed Rearden into signing over the rights to his metal. Dagny sees Rearden that night. She cannot tell him where she has been, but Rearden realizes that she met the man she truly loves while she was gone.
Rearden now feels free from the grip of the altruist ethics and yearns to see the man who helped release him—Francisco. Rearden laments that he will never see Francisco again.
