This act opens the next morning in Lady Britomart's library, and we are immediately astonished to see Major Barbara dressed not in her Salvation Army uniform but in an "ordinary fashionable dress." Charles Lomax, trying to console Barbara, makes an inopportune remark about there being "a certain amount of tosh about the Salvation Army." Adolphus enters in a questionable state of sobriety and announces that he has "been making a night of it" with Andrew Undershaft, whom he calls "the Prince of Darkness" and who, he says, has plied Adolphus with plentiful amounts of Spanish burgundy even though Undershaft himself is a teetotaler.
Barbara inquires about the Salvation Army meeting and learns that it was a tremendous success with a hundred and seventeen conversions in addition to many prayers said for Bodger, as well as prayers for the anonymous donor of five thousand pounds to the Army. At this moment, Morrison, the butler, announces the arrival of Andrew Undershaft, and Lady Britomart sends everyone out so that she can confront Andrew alone about the family's affairs.
Andrew Undershaft genially concedes to Lady Britomart's stipulation about Barbara and Sarah's need for money. But when Lady Britomart broaches the subject of their son, Stephen, Undershaft loses all interest, maintaining that Stephen doesn't show the slightest resemblance to either of them; moreover, he asserts that Stephen might be able to learn the rudimentary mechanics of running the office routines of the munitions foundry but that he certainly has no aptitude for managing the entire Undershaft and Lazarus empire. Furthermore, Undershaft is determined to remain true to the Undershaft tradition of leaving the foundry to a foundling — a "tradition" that has never been broken. He admits, however, that he has not yet found a suitable successor; everyone whom he has found is "exactly like Stephen" — inept. Undershaft is searching for a man who has not yet been corrupted by conventional ideas — a man whose outstanding qualities are a strong will and an independent turn of mind. He tells Lady Britomart to find such a foundling, and he will be willing to marry him off to Barbara, thus keeping "the foundry in the family."
Stephen enters then, and after some sharp conversational exchanges, he makes it quite clear — to both his father and his mother — that he has absolutely no interest and absolutely no capacity for managing such a business as the munitions foundry: "I repudiate the cannon business."
Undershaft is so relieved that he promises to help Stephen get established in another career; after all, Undershaft says, "I owe you a fair start in life in exchange for disinheriting you." After further discussion concerning Stephen's aptitudes, Stephen confesses that his supreme quality is that he knows "the difference between right and wrong." This statement utterly fascinates Undershaft since this is the single philosophical distinction that has baffled all of the wisest philosophers and intellects throughout the ages. He scoffs at his son, but Stephen manages to keep his temper, even if with difficulty.
Yet Stephen objects to a derogatory statement which his father makes about politics, for Undershaft begins lecturing his son upon the reality of who it is who really runs the country; the real rulers, Undershaft says, are the people who have power and use it to control the masses. Stephen responds — as best he can — with a few well-chosen clichés about the importance of national character as being the true power responsible for the operation of the government, and Undershaft announces that Stephen has just discovered his career: Stephen will be a journalist, and, in this way, Stephen can profit from his high-sounding moral clichés.
Before Stephen has a chance to retaliate to this suggestion, the others return ready for their journey to the Lazarus and Undershaft Munitions Foundry. Barbara and Cusins will go with Undershaft in a new bulletproof vehicle which he is experimenting with; the others will follow in the carriage. Before they leave, Barbara is convinced that she is about to experience some infernal "pit where lost creatures with blackened faces stir up smoky fires and are driven and tormented by my father." Undershaft explains that it is quite the contrary: "It is a spotless clean and beautiful hillside town," where it is not necessary that he ever give any orders because of the natural propensity of the Englishman to keep people below them in tow and to have such awe for rank and privilege that he never feels a need to be dictatorial.
Barbara then tells him that although she will keep her bargain and visit his "factory of death," she will never forgive him for destroying the soul of a man (Bill Walker) whom she was on the verge of saving only the day before; to kill physically with cannons, Barbara says, is one thing, but to kill another person's soul is unforgivable. When Undershaft very cleverly reminds her that one cannot "strike a man to the heart and leave no mark on him," Barbara then joyfully realizes that her father is right — even though Cusins sees it as the cunning of "the Prince of Darkness."
This first scene presents the results of last night's breakup. While the scene is partly light social comedy, yet all of the serious themes of the play are reinforced. With the entrance of Cusins, we learn, for example, that last night's rally was a tremendous success and that Cusins spent the evening drinking wine with Undershaft, who is a teetotaler. Essentially, Shaw's men of purpose (such as Undershaft) are often more concerned with destiny and their own force on life than with wasting their time drinking. Thus, Undershaft's purpose last night was apparently to influence Cusins and to discover how Cusins could be "used" by Undershaft. But Cusins does not admit that it was Undershaft who made him drunk; instead, he insists that it was Dionysus who possessed him. Instead of Cusins' gaining salvation through the Salvation Army, we now see that Cusins is going to achieve salvation through an emotional, Dionysian wisdom; that is, through a rejection of moral conformity. The contrast is comic: Into the very proper drawing room comes an intellectual drunk, rejecting propriety and social decorum in favor of some sort of wild Dionysian power.
In the brief scene between Lady Britomart and Undershaft, we have the final turn of the plot introduced. Undershaft has admitted that he cannot find a foundling to take over the foundry, and he asks Lady Britomart to find one, and then they can marry off the foundling to Barbara and thus keep the foundry in the family. This prepares the plot for the unique way that Cusins — as a foundling — will be able to both marry Barbara and keep the foundry in the family.
The scene between Stephen and his father is high comedy. In spite of Lady Britomart's protestations that breeding is more important than anything (thus Stephen, who is well-bred, should inherit the foundry), yet everything that Stephen says or does shows him to be completely inept and incapable of doing anything except uttering high-sounding clichés. When he maintains that he, at least, knows the difference between "right and wrong," he is not even intelligent enough to know that since the very beginning of philosophy, that very subject has been among the main concerns of humanity's greatest minds. For Stephen to be so flippant is comic; for Stephen not to even know how absurd he is is incredulous. Thus, Andrew Undershaft is only more confirmed than ever in his decision to be faithful to the Undershaft tradition and find a man of unusual potential; Stephen is clearly fit only to spout high-toned clichés.
Shaw also uses this scene for another of his attacks on politics. One should remember this point when Undershaft tells Stephen that if he can't do anything else, then he should go into politics; Shaw was keenly aware that there would probably be many members of Parliament in the audience. In addition, Shaw is being brutally realistic when he points out that it is power and money which influence government — not individuals and character.
We should remember that this is the turning point for Barbara. As the great tempters of the past have come from infernal pits of hellfire and damnation, Barbara (whose soul will now be tempted) envisions the Undershaft foundry in images of smoky fires. The image, of course, is also the image of the ugly nineteenth-century factory — a very real place of death and destruction. Barbara's soul, then, will be won when she sees that the town, as described by her father, really does exist — that the "death and destruction" factory has created an ideal social community where everyone is happy and contented with their lives.