Lillian Rearden decides to visit her husband’s suite at the Wayne-Falkland Hotel, and to spend some time with him. Lately Hank has neglected her even more than usual, especially after she had populated their anniversary party with such sycophants as Bertram Scudder and Balph Eubank, men whom had directly attacked Hank’s business in the press. When Hank returns to his suite in the morning after spending the night with Dagny Lillian confronts him and tells him that she knows he is having an affair. Hank refuses to tell her who his lover is, and Lillian refuses to give him a divorce. Lillian spews vitriolic insults at Hank, and two part in anger.
Hank’s refusal to sell his Metal to the State Science Institute is to have imminent and potentially dire consequences. Dr. Floyd Ferris comes to visit Rearden and threatens to prosecute him for his illegal sales to Ken Danagger, a trusted business partner and Rearden’s main supplier of coal. That the government would prosecute Rearden for something other than the thing they are trying to compel him to do is evidence of its illegitimacy. Rearden is adamant about his right to sell coal to Danagger and his right to refuse to sell Rearden Metal to the Institute. The prosecution will go ahead and Rearden will be put on trial.
Late one night Francisco d’Anconia visits Hank Rearden at his office, and they discuss what is happening to business world. Hank is still fighting his prejudice toward Francisco, thinking he is a playboy and a destroyer of businesses. They talk about what Hank is doing, working for a system of government which is bent on his own destruction, and that his refusal to sell Metal to the Institute is not enough to protest unfair economic practices. Hank Rearden refuses to give up Rearden Steel, however, but he is beginning to like Francisco a great deal. During this discussion Francisco intimates that there is a group of people who are working to stop the economic motor of the world, and that it will be the equivalent of Atlas, the god whom the Greeks believed held the world on his shoulders, shrugging. This explains the title of the novel.
Dagny, knowing that Ken Danagger will be indicted, rushes to see him in his office before he can be reached by the “destroyer”. She is too late, for a mysterious man leaves Danagger’s office before she can get in the door. When she finally gets in to see the coal magnate he has decided to retire. Dagny tries to convince Ken to stay and fight, but he refuses.
Chapter IV, “The Sanction of the Victim” refers to one of the precepts that the looters seem to need so desperately from the people they loot. Hank is beginning to understand that this in not only what the government is looking for when they tried to make him sell his Metal to the State Science Institute, but what his brother, wife, and mother have been trying to do by making him feel guilty about being their provider for all these years. Rearden is tried for his illegal sales of Rearden Metal, but he calmly refutes all of the courts claims against him and shows quite clearly that there are no objective rules or values held by that court anymore so it useless for them to try him. He forces a capitulation by the judge by saying that they will have to force him to do what they want. The court was hoping that the threat of a fine and imprisonment would be enough to make Rearden do as they wanted him to, but they do not want to get the bad press of publicly forcing Rearden to do anything. Rearden is still a hero to many people, and the government would lose more than gain by making an example of him. Rearden refuses them the “sanction of the victim” and Rearden is let off with a nominal fine. This victory gives hope to Dagny and Hank that they can win against the looters.
More of Francisco’s surprising nature is revealed when Rearden visits him at the Wayne-Falkland hotel and questions him closely about his debauched nature. Another long discussion ensues between the two men, because Hank is becoming fascinated by the contradictions he perceives in Francisco. When there was a furnace explosion at Rearden Steel Francisco had worked side-by-side with Rearden to stop the breach. That kind of physical courage Rearden had not expected to see in a worthless playboy like Francisco. As ever, Francisco has him check his assumptions. Then Francisco explains that he is not the womanizer everyone thinks he is, and he has only ever had one lover in his life. Francisco sees sex as an expression of one’s self-worth, and a physical expression of the spiritual love of life. Casual or insincere relationships only show one’s self-loathing; men like Rearden and Francisco must always desire the exclusive love of a “heroine” (491). Rearden begins to believe that the persona talked about in the papers is very different than the real Francisco d’Anconia.
Hank Rearden has ordered a great deal of copper for Taggart Transcontinental from d’Anconia Copper. He makes the mistake of telling Francisco this. Before Rearden leaves, Francisco swears to Rearden that he is his friend, no matter what happens. Rearden doesn’t know what this means, but when he learns that the famous pirate, Ragnar Danneskjold, has sunk Hank’s entire shipment of copper Rearden no longer believes him.
Francisco communicates to Hank and to the reader another linchpin of the looter government’s scheme to control the producers. The victims must give the looters consent to take their wealth away from them, and give them their sanction that it is right, for the looters to continue to prop up their system of institutionalized theft. Throughout the novel the major characters on the side of the looter government ask reassurance and sanction from the people they are hurting and exploiting. In this case, Hank Rearden is put before a tribunal that he has no confidence in, and, in a few logical sentences, can dismantle its paper power over him by showing that it has no just authority or objective rights. If he had submitted to its authority they would have given him a far worse punishment than a fine, and the consequence of that might have been that Floyd Ferris would have gotten Hank a suspended sentence on the condition that he sell Rearden Metal to the State Science Institute. Rearden will not submit, and he still has some power over public opinion, and the government has more need of him than he does of it; thus, by withholding the sanction of the victim Rearden renders the government relatively powerless. This is a continuation of the idea of the “consent of the governed”. The populace has been duped into believing that the government has their best interests at heart, but Rearden does not believe it and therefore is able to effectively answer its power.
Francisco’s character is being revealed as much more in line with what Dagny and Eddie Willers knew of him as a child and young man than what the newspapers say about him. When Francisco tells Hank that he has only ever loved one woman, the reader, but not Hank, knows that this must be Dagny. Francisco has been faithful to Dagny all these years since they parted in their early twenties, like his ancestor Sebastian d’Anconia was to his love hundreds of years ago. The picture of Francisco is now entirely different. He is not a womanizing playboy who lives for pleasure, nor is he the competent heir of the d’Anconia fortune he promised to be in early adulthood. He is working to destroy his company so that it cannot be taken to serve the looters.
There have been several mentions of the Norwegian Ragnar Danneskjold so far in the book, a seaman who works to pirate legal shipments between People’s States and take their cargo. He is a figure who is wanted by several governments and, if found, would be shot on sight because he has caused such damage to national economies. He takes cargo and generally, unless directly attacked, lets crews go free. His goal is not bloodshed but simple piracy – the hijacking and destruction of goods in order to hasten the decline of looter governments. He will appear again later in the novel. What Francisco reacts to when Hank tells him about the shipment of copper for Taggart Transcontinental is the knowledge that he must now destroy that shipment. He knows that Hank Rearden will not understand, and he is correct. Hank becomes murderously angry at this theft, which he perceives as a perverse betrayal by a man whom he had very much wished to be his friend.
This is the first clue that Danneskjold and Francisco might be working together. Dr. Robert Stadler had told Dagny that the two young men were together at Patrick Henry University, so the connection seems obvious now. The third man, the inventor of the motor, is presumed dead by Robert Stadler, and there is currently no reason to believe otherwise.
Rand’s ideas about sex and self-worth, as stated by Francisco d’Anconia, were revolutionary for her time (the 1950s). It is based in a rational humanism, without any received moral code from religious or cultural traditions. There is no mention of God or shame or modesty in Rand’s sexual code, and it is based in the assumption that all rational beings should strive to make the best of themselves and respect themselves as good and worthy of their own human desires. It is not an everything-goes philosophy, for Rand believed that right-thinking individuals who know their self-worth will not want to cheapen themselves by promiscuous or meaningless sex. Here Rand sees causality between belief in one’s self-worth and love of material life on earth, and healthy and joyous sexuality. A sort of natural morality, she claims, through Francisco’s words, will emerge when a person has no shame, a code of right values, and a view of him- or herself as a good, worthwhile being. There seems to be little differentiation between the codes of sexuality between women and men, which would have been a somewhat radical idea even in the 1950s, when feminism had not made many inroads into popular culture.
The importance of this code is not necessarily the sexual conduct of Rand’s characters, which may or may not appear moral to readers, but the fact that this, like Rand’s aesthetics and political ideas, stems from what she believes to be objective reality and the paramount importance of self-interest. Dagny acts in her self-interest when she begins her affair with Hank. She does not worry about the effect her actions may have on Hank’s wife or the rest of his family. Hank feels shame for his actions because he has been conditioned by his family to feel shame for his own desires. The marital contract, once it was established that Hank and Lillian had no sympathy for each other, is considered null and void under Rand’s philosophy. There is no reason, Rand (and Dagny) might argue, to maintain a sham marriage for the sake of appearances, for the sake of the state of marriage in the community, or simply to the keep a promise. This would cheapen both parties. It is convenient for Hank that he has no children with Lillian, because it makes the dissolution of the marriage, and his subsequent conversion to ideas like Francisco and Dagny have, that much easier. He continues to support Lillian (and his mother and brother) until they are divorced. It is only because Lillian acts so hatefully to him that he decides to engineer the divorce to leave her penniless.