Dagny Taggart’s childhood is exposited, beginning when she was nine years old and decided to someday run Taggart Transconintental Railroad (p 50). Dagny was not alone, as “she and Eddie Willers had given themselves to the railroad from the first conscious days of their childhood.” Her ascension of the Taggart Transcontinental’s corporate ladder is recounted (p 51). At sixteen she began work as a night operator; thereafter she climbed “like advancing through empty rooms” by commanding the authority that her superiors held “but seemed afraid to exercise”; “nobody opposed her, yet nobody approved of her progress.”

Interwoven with Dagny Taggart’s history is that of her brother, James Taggart (p 52). After their father’s death, James inherited the controlling stock of Taggart Transcontinental was left to James Taggart. As the eldest son — and thus the traditional President — the Board of Directors promptly and eagerly elected James as President “in the same manner as they refused to walk under a ladder.” The Board spoke of James’ knack at “making railroads popular” and his “Washington ability” — “he seemed unusually skillful at obtaining favors from the Legislature.”

Francisco d’Anconia is dramatically introduced as having his name across “the ticker tape of every stock exchange” and “scandalous headlines” (p 53). The last descendent of one of Argentina’s noblest families, he inherited his fortune at 23 years old and was “the copper king of the world”; now at 36 years old he was “the most spectacularly worthless playboy on earth.” His inherited assets were formidable: “most of the copper mines of Chile”; “half of South America”; and cattle ranches, coffee plantations and sundry mines scattered from South to North America. His recent endeavor was the San Sebastián mines, whose stock had been “begged out of his hands” and which was owned mostly by James Taggart, Orren Boyle and “their friends.”

James Taggart’s “first step” as President was to build a railroad branch from Texas into “the wilderness of San Sebastián” (p 52-53). Dagny “thought of the many branch lines which Taggart Transcontinental had had to abandon” and the “ominous need for repairs, ominously neglected over the entire system” (p 54). The Board’s approach to maintenance seemed like a game “with a piece of rubber that could be stretched a little, then a little more.” “The company needed all its resources to rebuild the Rio Norte Line; it could not do both” (p 53). Dagny was “only an assistant in the Operating Department, too young, without authority, and nobody listened” as she fought via “whoever would listen to her” against building the San Sebastián Line (p 54). “She was unable then or since, to understand the motives of those who decided to build the line.” She was a mere “helpless spectator” — a “minority member” — and when the Board met she felt a “strange evasiveness” and that “the real reason of their decision was never stated, but clear to everyone except herself.”

The People’s State of Mexico was certainly eager to accommodate,

Dagny sat listening as the Board prepared to vote on the San Sebastián Line (p 54),

Dagny was apparently distracted,

The Board continued to rattle,

The vote passed. Dagny left the Board room with two words repeating “in the numbed emptiness of her mind” — Get out (p 55). She was not alone in her thoughts — “two of the directors resigned; so did the Vice-President in Charge of Operation. He was replaced by a friend of James Taggart.” However, Dagny is “aghast” at herself and stymies thoughts of resigning,

Dagny felt differently three years later, when construction of the San Sebastián Line “had been under way for three years” yet only “one third of its track was laid” (p 56) and the budget had exceeded 30 million dollars (p 55-56). Dagny gave her brother an “ultimatum” (p 56),

Budgeted at 30 million dollars (p 55), building the San Sebastián Line was marred by: “five years of struggle”; “miles of wasted track”; and losses “like a red trickle from a wound which would not heal” (p 52-53). As the San Sebastián Line grew “at the rate of two miles a month” the shot track of the Rio Norte Line caused a train carrying a Wyatt Oil shipment to go “hurtling down an embankment and into a blazing junk pile” (p 55). An “obscure railroad” called Phoenix-Durango which was “struggling well” shipped Wyatt Oil thereafter. Once the Vice-President in Charge of Operation, it was Dagny “who finally gave them their San Sebastián Line” by firing “Jim’s friends” and hiring McNamara of Cleveland (p 63 s 133) “who completed the job in one year” (p 56).

A year after the line’s completion, “no surge of trade” nor “trains loaded with copper” had “come across the border” (p 56). As “a few car-loads came clattering” along the San Sebastián Line, “the drain on Taggart Transcontinental had not stopped.” Dagny now sat at her office amidst “sheets of figures announcing losses and more losses” with the knowledge that the route to “save the system” was to rebuild the Rio Norte Line. A “point of support” is “one thing, at least, that could be counted upon not to crumble when needed: Rearden’s response “Sure” when Dagny had called from Cleveland (p 19) to query if he could provide “rail on the shortest notice and the longest credit possible” as a way of asking, “Hank, can you save us?” Conversely, Dagny Taggart sees one name above all others across the failure of the San Sebastián Line, the same name on “cards attached to flowers in the boudoirs of women scattered through three continents” — Francisco d’Anconia (p 53).

James Taggart approaches Dagny’s desk “like a child being dragged to punishment, storing the resentment for all his future years” (p 56). After what Orren Boyle had told him about the San Sebastián Line’s abhorrent service (p 49), James demands to know what Dagny is “trying to pull on the San Sebastián Line” with its infrequent service (p 57). Dagny explains to a heated James Taggart that “the one passenger train a day” and “one freight train every other night” don’t even pay for themselves. James insists the Mexicans “expect real service” — Dagny responds, “I’m sure they do.” He iterates that “they need trains” — Dagny queries, “for what?” He explains, to “develop local industries” — but Dagny remains succinct, “I don’t expect them to develop.” James retorts, “The copper traffic alone will pay for everything” — Dagny only asks, “When?”

James grows more venomous as his face assumes the “satisfaction of a person about to utter something that hurt” (p 57). Watching Dagny’s face, James asks if she doubts the San Sebastián Mines will succeed, “When it’s Francisco d’Anconia who’s running them?” Dagny states that Francisco d’Anconia “has turned into a worthless bum” who she has not been friends with for “the last ten years.” James continues to inject venom, “I always thought that’s what he was .. but you didn’t share my opinion. … Shall I quote some of the things you said about him? I can only surmise as to some of the things you did.” Dagny’s emotionless face if James came to discuss Francisco d’Anconia, causing James’ face to show the “anger of failure” as he switches topics.

After berating Dagny for the San Sebastián Line schedule, James Taggart rebukes her equipment selection (p 58). “What sort of rolling stock are you using down there?” “The worst I could find.” “You admit that?” “I’ve stated it on the paper in the reports I sent you.” When asked about the wood-burning locomotives, Dagny mentions “Eddie found them for me in sombody’s abandoned roundhouse down in Louisiana.” James is incredulous, but Dagny is open that she “left nothing but junk” and moved “everything that could be moved — switch engines, shop tools, even typewriters and mirrors — out of Mexico.” James continues to demand answers: “What’s going on?”; “What in blazes?”; and even “What in hell’s the big idea?” — until reaching the core of Dagny’s reasoning: “the looters won’t have as much to loot when they nationalize the line.”

James leaps to his feet, seemingly more incredulous than before (p 58). Yet when Dagny insists “there’s not a car, engine or ton of coal that we can spare anywhere” James only responds that he “absolutely won’t permit such an outrageous police toward a friendly people who need our help.” Dagny prepares a pad and pencil and asks James which cars to cut from what lines to run how many trains on the San Sebastián Lines. He dismisses this as her “usual rotten trick” of “switching the responsibility” and that he will not let her trap him (p 58-59). Just as James leaves Dagny’s office, he states he’ll demand a decision “once and for all” on her department’s authority and that she’ll “have to answer for this” (p 59).

After nightfall, Dagny leaves her office after “the small defeat of being tired” (p 59). She exits the building through the Taggart Terminal instead of the lobby because “she liked to walk through it on her way home” — “she had always felt that the concourse looked like a temple.” A statue of Taggart Transcontinental’s found, Nathaniel Taggart, dominated the concourse (p 59) — “all that Dagny wanted of life was contained in the desire to hol her head as he did” (p 60). A brief biography of Nathaniel Taggart ensues that samples the “notorious” legends of how he founded and ran Taggart Transcontinental without “force or fraud” nor government funds, grants or favors (p 59-60). Admiring the statue “was a moment’s rest” from “a burden she could not name” (p 61).

Dagny makes her regular stop at a newsstand operated by a man who “seemed to be part of the Taggart Terminal” like a feeble watchdog whose loyal presence was reassuring (p 61). The man liked to see her coming because “he alone knew” the importance of the approaching figure. The two enter a discussion of cigarettes and their tie to human thought, wondering “what great things” have come from the hours “watching the smoke of a cigarette, thinking.” Dagny involuntarily asks “do they every think?” and the man begins to reflect on his observations on the past “hurry of men who knew where they were going and were eager to get there” that has morphed into “fear” as the “purpose that drives them” lately.