Eddie Willers meets his worker friend at the Taggart cafeteria. He complains about the terrible effect of the directive on the railroad. Competent men are abandoning their posts, and only shiftless vagrants are taking jobs. A friend of Jim’s, Clifton Locey, has been hired to replace Dagny. His sole purpose each day is to avoid making decisions. The worker tells Eddie that he will not be coming back the next week because he is going away for a month’s vacation.
Rearden has moved out of his house and asked his lawyers to pull whatever strings are necessary to obtain a divorce from Lillian with no financial settlement for her. Walking to his apartment one night, he meets a man dressed in dark clothes who calls himself the friend of the friendless and hands Rearden a bar of solid gold. He tells Rearden that the gold is partial repayment for the income taxes he has been paying to a corrupt government, and it represents justice. He has been collecting the taxes of many industrialists for years in order to help them rebuild the world after the looters force it to collapse. When Rearden learns that the man is Ragnar Danneskjold, he is appalled, but moments later lies to police to protect him.
Taggart’s cross-country Comet is stranded in Colorado. Kip Chalmers, an important politician, is on board and demands that the train move ahead. The diesel engine is beyond repair, and the only available replacement is coal-burning and cannot enter the long, airless Taggart Tunnel. After a series of communications in which everyone from Jim Taggart to the train’s engineer refuses to take responsibility by sending vague directives, Chalmers is finally able to bully the employees into using the coal engine. A drunken engineer agrees to take the Comet through the tunnel after the assigned engineer resigns in protest. Everyone on board is killed from the toxic fumes. The last thing they see is the still-burning flame of Wyatt’s oil fields (“Wyatt’s Torch”). Later, an army munitions train slams into the stalled Comet and explodes, destroying the tunnel.
Francisco visits Dagny at her country lodge. He has come to confess his love and tell her everything. Now that she has quit, he thinks she is ready to join him. He tells her that he is one of the industrialists who have withdrawn from the world. But instead of disappearing like the others, he has stayed and systematically ruined d’Anconia Copper to keep the looters from taking it. She is furious that he could do such dishonor to something he loved so much, but he tells her that it was for the sake of his love that he did what he did. Losing her respect was the hardest part.
Dagny begins to see the logic of Francisco’s withdrawal and is ready to follow him when the radio broadcasts the news of the tunnel disaster. Instinctively, she rushes back to her job. She restores train service by rerouting onto other railroads’ tracks. Her actions are illegal under the Directive, but she knows the Unification Board will not stop her, as they now depend on her to fix the problem. She calls Rearden and admits she knows the looters are using her love for her railroad to hold her captive, just as they hold Rearden for his love of his work.
By now we know that the worker Eddie dines with in the Taggart cafeteria is a key figure in the story, but still we know nothing about him. In a novel filled with dialogue, he himself has no lines. Everything he says is inferred from Eddie’s responses. This curious fact highlights the mystery of who he is and why he is so interested in Eddie’s stories. Whoever he is, he knows a great deal about Dagny from his conversations with Eddie.