Over drinks in a New York bar, four men conduct a meeting that will greatly impact the U.S. economy. Orren Boyle wants Jim Taggart to use his influence with various Washington politicians to pass legislation that will strip Rearden of his ore mines. Taggart agrees to do it. Taggart and Boyle are counting on Paul Larkin, who is present at the meeting, to receive the mines from Rearden and to provide Boyle with first claim on the ore. Taggart, meanwhile, wants Boyle to speak to friends on the National Alliance of Railroads regarding the competition that Dan Conway's Phoenix-Durango Railroad gives Taggart Transcontinental in Colorado. Taggart wants the Alliance to force the Phoenix-Durango out on the grounds that it provides "cutthroat competition" to Taggart Transcontinental in a region where the latter company has historical priority. Boyle states that Taggart's idea is sound, and he'll speak to his friends about it. The fourth member of the party is Wesley Mouch, Rearden's Washington man. In return for not reporting the proposed legislation to Rearden, Mouch will receive a bureaucratic post in Washington, courtesy of Taggart's influence.
Taggart comes to his sister's office. Boyle has told him that on a recent trip to the San Sebastian Mines in Mexico, he observed the limited and archaic train service that Taggart Transcontinental provides. Boyle questions the level of service provided. Dagny reminds Jim of several facts. The San Sebastian Mines, built by Francisco d'Anconia, have produced no copper. Francisco never even presented facts to support the claim that any copper exists there; Jim and his friends invested money based only on Francisco's business reputation. And, in the past ten years, Francisco has degenerated from a remarkable businessman into a worthless playboy. Dagny tells Jim that she's shipped every piece of railroad property that can be moved north of the border, so that when the Mexican government nationalizes the San Sebastian Line, the railroad's loss will be minimal.
Dagny's assistant, Eddie Willers, often eats his meals with a railroad worker in the employees' cafeteria of the Taggart Terminal. He doesn't know the worker's name or job, but because of his rough, grease-stained clothes, Eddie assumes that the job is menial. However, the worker has a deep interest in the railroad, and Eddie feels comfortable speaking to him. He tells the worker that the Rio Norte Line will save Taggart Transcontinental and that Dagny has found a reliable contractor to rebuild the line — McNamara of Cleveland.
