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"But, Miss Taggart -" [Mr. Thompson said.]
"I didn't come here to argue."
She was at the door when he sighed and said, "I hope he's still alive." She stopped. "I hope they haven't done anything rash."
A moment passed before she was able to ask, "Who?" and to make it a word, not a scream.
He shrugged, spreading his arms and letting them drop helplessly. "I can't hold my own boys in line any longer. I can't tell what they might attempt to do. There's one clique - the Ferris-Lawson-Meigs faction - that's been after me for over a year to adopt stronger measures. A tougher policy, they mean. Frankly, what they mean is: to resort to terror. Introduce the death penalty for civilian crimes, for critics, dissenters, and the like. Their argument is that since people won't co-operate, won't act for the public interest voluntarily, we've got to force them to. Nothing will make our system work, they say, but terror.... We're trying to keep the Ferris boys in check, but... you see, they're set against any surrender to John Galt. They don't want to deal with him. They don't want us to find him. I wouldn't put anything past them. If they found him first, they'd - there's no telling what they might do... That's what worries me. Why doesn't he answer? Why hasn't he answered us at all? What if they've found him and killed him? I wouldn't know..."

Is he actually telling the truth here? It is perfectly true that certain people were arguing for extreme measures sooner, that Mr. Thompson had resisted such extreme measures, and that it was Mr. Thompson's idea to negotiate with John Galt rather than to kill him like Robert Stadler wanted to. Is he actually worried that they'd killed him? Or is this a veiled threat (i.e. "either cooperate or I'll let the dogs off the leash")? Or is he trying to manipulate her into trying to contact John Galt knowing that he's having her watched? Or is it some combination of the above?

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There are two factors to be considered here: first, Mr. Thompson seems to genuinely want to find John Galt and to negotiate with him. His belief seems perfectly sincere (or, at least, as sincere as the Looters get). He at least tells himself that he doesn't want to hurt John Galt, just negotiate.

Secondly, he (correctly) believes that Dagny knows more than she's letting on. He's already given orders to have her followed day and night, and had questioned her closely about Galt's whereabouts on several occasions. (In fact, that's what Dagny was doing in his office before that exchange in the first place).

Third, he seems aware that John Galt's their last chance to make the system work and that, as such, he needs John alive.

Fourth, it was perfectly true that the Ferris-Lawson-Meigs group was after outright terror.

That being said: it was both. He was legitimately worried that John Galt was dead, and he was trying to manipulate Dagny into giving him any information that she had been "holding out" on (either because he assumed that she cared about and/or was protecting Galt to some degree - which she was - or that he thought that she wouldn't allow that kind of a catastrophe to happen to him given their obvious need).

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