Ken Danagger’s cousin, who has tried to take over Danagger Coal after the executive’s disappearance, tells Taggart Transcontinental in Chapter V that “he could not help it” (496) that the shipment to the railway was delayed. Rearden Steel, too, has had to default on an order for the first time in its history. The economy is seriously breaking down, with businesses and industry everywhere closing or going bankrupt. The government refuses to acknowledge the importance of business to the public welfare, calling them only “private ventures for private profit” (497).
During this cold winter people everywhere are suffering horribly, but the government refuses to take any action to stimulate business. The government and the people believe that they are doing the right thing by limiting larger concerns to give more chances to smaller ones; the result is that almost all the businesses not supported by favors from Washington fail. Copper from d’Anconia Copper is no longer reaching the United States because the pirate Ragnar Danneskjold is sinking every ship that carries it; this seriously hampers almost every industry in America.
Dagny attends the meeting of the Board of Directors of Taggart Transcontinental. After much discussion about blame and the “right people in Washington” the board agrees that it is now necessary, because the lack of freight traffic, to close the Rio Norte Line. All of Dagny’s work building that line (which she called the John Galt Line and for which she had temporarily left Taggart Transcontinental to build) is now for nothing because of the looter government’s inept policies. However, they have to ask permission of the government to close the line, and the government is not willing to grant it. The union wants a wage increase, and the government officials blackmail Taggart Transcontinental into the increase by threatening to recall, before the agreed-upon time, a large amount of Taggart Transcontinental bonds. The rail has no choice, and it is clear that there is no justice to be had from the government. In exchange for the wage increase, Washington allows Taggart Transcontinental to close the Rio Norte Line.
A depressed Dagny finds Francisco d’Anconia waiting for her in the lobby. He knows how much the John Galt/Rio Norte Line meant to her, and he offers his quiet companionship on this difficult night. They go out for a drink together, and talk about how the world has changed since the days of Nat Taggart and Sebastian d’Anconia, their ancestors. Before they leave each other Dagny questions Francisco about his recent talks with Hank Rearden. She knows that Hanks is now very angry with Francisco about something, but Francisco answers “He was the only man – with one exception – to whom I would have given my life!” (517). Dagny wants to know who the other man is, and Francisco says that he already has given his life to him. They talk about John Galt, and Francisco says that he, Francisco, knows who he is – a Prometheus who has withdrawn his gift of fire from humanity until humanity stops torturing him.
Dagny goes to supervise the last train run on the John Galt Line, and the disgruntled people there complain that the only way the poor will have a chance is if the rich are destroyed. Rearden appears and helps Dagny through this difficult moment, and they ride back to New York together in her private car.
Lillian Rearden is contacted by James Taggart – he is disappointed that Hank has managed to wriggle out of trouble by standing up for himself at the trial. Lillian had promised to help Jim control Hank, but she has failed in this respect. Jim would like to have information to blackmail Hank, but at present Lillian has nothing for Jim. It is an unpleasant conversation between them, full of half-truths and deception.
Lillian does, however, know that Hank has a mistress. She finds out that Hank is aboard the Taggart Comet from his secretary Gwen Ives, but she also discovers that he is not traveling under his own name. Lillian deduces that this is because he is not traveling alone, and he is probably with his mistress. Lillian, hoping to catch him out, waits for him on the platform of the Taggart Terminal looking for him so that she may learn the identity of his mistress. She finds him on the platform, and then sees Dagny Taggart coming out of her private car. She now knows the identity of his mistress, and, as Hank and Lillian ride away in a taxicab, she insults Hank and Dagny. She swears to never divorce him, however, and Hank vows to beat her up if she ever mentions Dagny again.
Chapter VI “Miracle Metal” begins with Wesley Mouch, Jim Taggart, the Head of State Mr. Thompson, and various other functionaries and flunkies discussing the passage of Directive 10-289. This directive completes the transition of America to an authoritarian socialist state. There are eight points in the Directive: all workers are attached to their jobs, and effectively enslaved, all existing businesses are compelled to remain in operation, all patents and copyrights must be “voluntarily signed” over to the state, no new patents will be allowed, all production levels must remain the same as the current year, every person must spend each year what they spend this year, all wages, prices and forms of income will be frozen, and any case not decided under these eight points must be decided with final authority by the Unification Board.
Dagny is working at her desk in the Taggart Building when she learns that this law will soon be enacted. She resigns immediately, before they can chain her to her job when the directive goes into effect on May 1st. She tells no one where she is going except Eddie Willers. She leaves instructions, however, that if Hank Rearden wants to find her, Eddie may tell him where she is. She retreats to a remote cabin, inherited by her from her family, in the woods.
Hank Rearden is now being told that he must make a voluntary gift to the state of the patent on Rearden Metal, so that all other producers may profit by his work. Rearden, on the eve of May 1st, has no intention of giving the State his Metal, but Dr. Floyd Ferris, an old enemy, comes to his office and tells him that he is compelled to do so. Ferris threatens to make Hank and Dagny’s affair public knowledge if he does not sign over the metal. The government has learned this from Jim Taggart, who got the information from Lillian Rearden. Hank doesn’t know where the information came from, however, but Floyd Ferris shows him that the government has proof of their affair. Hank tries to reason with Ferris, saying that this sort of scheme wouldn’t work if he and Dagny were the kind of debauched people that he will try to make them out to be. Though he knows that Dagny would not allow it if she knew what he was going to do, he signs the Gift Certificate in order to spare Dagny the disgrace that would inevitably fall more heavily on her than on him.
Rearden’s act of selflessness shows that he does not think of Dagny just as a sexual object as he said he did after their first night together at Ellis Wyatt’s house. He remembers his first meeting with her very fondly, and he has come to the conclusion that he would rather give up his Metal than watch her bear the brunt of the shame. Dagny is nowhere that she can be reached, at the moment, so there is no way that she can stop it. All the years of work that Rearden has spent on his special, revolutionary alloy are now to be converted into profit for other people rather than himself. But the fact that the government must use blackmail of the lowest kind in order to compel Hank to comply with their undemocratic “directive” is perhaps the thing that hurts Hank the most. The irony is extreme when Hank signs his name “at the foot of the Statue of Liberty” on the Gift Certificate. There is no liberty left in America after the passing of 10-289.
Directive 10-289 is modeled on actual practices carried out by various communist states around the globe, although rarely were all of these brought into practice in one fell swoop as they are in Atlas Shrugged. The irony of making “the bastards stand still” (536), as Wesley Mouch says, by means of these crippling directives, which essentially make all business an artificial function of the government and all workers slaves, is that this will have the most devastating effect on the economy of anything yet undertaken. While the situation seems preposterous, and that so many people in Washington could have such a misunderstanding of the workings of the economy of a nation, Rand uses this example as an object lesson that too much control over business will only throttle it, causing suffering and privation to everyone in the end. Mouch, Taggart, and Mr. Thompson seem to have no understanding of this whatsoever, which appears a bit disingenuous; but this is a work of fiction.
Lillian’s motivation is harder to understand, but Rand makes it clear that her desires are not money. She does not seem to love Rearden for his sake, only for the position in society he provides and, possibly, the power marriage to him will give her to broker favors with people like James Taggart. She seems less hurt by envy when she learns that Hank is having an affair than she is outraged that he would dare to do something like this of his own initiative. Their relationship had not, from almost the very beginning of their marriage, been a close one, but one wonders how the cold distance of Hank might have lead her to this form of reprisal. But it is clear that she has never loved Hank for who he is, or even appreciated his ability to provide for her and the rest of his family. She, and Hank’s mother and brother, had always insulted Hank’s devotion to business and, they assumed, his lack of finer feelings.
The destruction of business is truly becoming alarming, and Directive 10-289 is a very misguided attempt to stop what seems to be now the inevitable decline. The hypocrisy of the government is laughable – the fact that a “Gift Certificate” had been signed by Hank Rearden to surrender the rights to his Metal doesn’t fool anyone. No one is safe from the predation of the government now, and it’s hollow reasoning that anything it does is for the “common welfare.”