The other denizens of the shelter return from a public fundraiser. Barbara recounts how Price moved a crowd with his confession. When Jenny tallies the contributions, Undershaft offers to add two pence. Barbara refuses his money because he has blood on his hands and cannot buy his salvation. She asks Cusins to write her another donation letter for the newspaper. The winter has brought starvation, everyone is unemployed, and the shelter will close without more funding. Barbara laments having to think more of collection than people's souls. "Genuine unselfishness is capable to anything my dear," remarks Undershaft ironically. "Mephistopheles! Machiavelli!" exclaims Cusins in an aside.
Suddenly Bill reappears with frost on his jacket. It comes from the ground in Canningtown. Todger knocked him down and knelt on his head to pray for him with Mog. Barbara enjoys the story frankly and Jenny expresses her sympathy. Bill refuses Jenny's Christian forgiveness and offers to pay her to square their debt. Barbara forbids Jenny from even taking his money for the Army. Undershaft offers to add ninety-nine pounds to Bill's one if Barbara accepts. Barbara is unmoved. Bill sullenly leaves his sovereign on the drum, stealthily Price drops his cap on it.
Mrs. Baines, an Army Commissioner, then enters. Barbara introduces her father. When Undershaft notes civilly that the nation knows of the Army's work, Baines laments their shortage of funds. Recalling the riots of 1866, she calls Price forth to confirm how the Army keeps him from revolution. Price skulks off, taking Bill's sovereign with him.
Baines announces a miracle, and says that the Lord Saxmundham has promised the Army five thousand pounds if five other gentleman will give one thousand each to make it ten. Undershaft reveals to his daughter that the lord is the former Sir Horace Bodger, the distiller, who received a baronet upon restoring the Hakington cathedral. To Baines' joy, Undershaft promises to help them meet Saxmundham's condition. "Wot prawce selvytion nah?" scoffs Bill in an aside to Barbara.
Barbara interjects and wonders whether they have forgotten the evil of Bodger's distilleries. Baines reminds her that Bodger has a soul to be saved too. Undershaft ironically remarks that alcohol makes life more bearable. He also claims his own disinterestedness, remorselessly conjuring the horrors of war to note that every convert the Army makes is a vote against war and a step toward his commercial ruin. Overtaken in an "ecstasy of mischief," Cusins cheers Bodger and Undershaft; Barbara almost crumbles when her fiancé fails her.
The group makes ready for a triumphant procession through the streets, Cusins playing the drum to the chorus of "For thee immense rejoicing—immenso giubilo—." As he notes, "Dionysus Undershaft has descended," and he is possessed. Barbara refuses to join them, pinning her silver S brooch on her father's collar. "Blood and Fire" cheers Baines as the group exits. Jenny cries "Glory Hallelujah" and Undershaft yells "My ducats and my daughter" yells Undershaft. Cusins screams "Money and gunpowder," and Barbara closes with "Drunkenness and Murder! My God: why hast thou forsaken me."
Bill derides the crushed Barbara. When he discovers Price has stolen his money, Barbara promises to refund him. A melancholic Barbara counts her pennies and asks Shirley to join her for the afternoon to discuss Tom Paine and Charles Bradlaugh. She also promises to get him a job.
What shapes the remainder of the act is the demonstration of Undershaft's power over the Salvation Army, a demonstration that converts Cusins over to his cause and leaves Barbara disillusioned. As Barbara remarks in the subsequent act, the purchase of the Army reveals that men like Undershaft and Bodger—and not God—hold her in their power. Her Holy Father has forsaken her and her earthly one has replaced him. Only men such as Undershaft bear the means of salvation. It is not only that, as Undershaft remarks in Act I, such men could take the Army's motto. The Army proceeds according to their will, domesticating the masses at their behest.
Recognizing her father's power, Barbara surrenders the pin marking her as savior and Army uniform. The Army's sale culminates in a march proclaiming "immense jubililation." For Cusins, "Dionysus Undershaft has descended" and possessed him. The marchers exit with a terrifying litany of cheers, one that brings the Army under the Undershaft banner.
Bill Walker's return serves as an ironic counterpoint to the Army's sale. Though Barbara forbids Jenny from allowing Bill to elude Christian forgiveness, pay for his crime, and thus buy his salvation, the Army hands itself over to its enemies, Bodger and Undershaft, to continue the work of salvation. Price's squalid theft and Rummy's gloating only underscore the Army's failures further.
Thus Barbara loses Bill's soul. As we will see in the next act, she will begrudge her father until she comes to understand the salvation he himself promises, the "truth," as she puts it, "behind all this frightful irony" that her father has brought. Note Barbara's almost nostalgic attempt to seek solace with Shirley, the honest poor man. Barbara carefully counts her coins and asks Shirley to speak to her of the great liberal democrats.
In demonstrating power here, Undershaft not only exacts his will through his wealth but through his carefully calculated irony as well. Undershaft will, for example, coolly proclaim the benefits of alcoholism for the poor or violently conjure the horrors of war under the cover of explaining his own disinterestedness.
Interestingly, Undershaft's ironic speech establishes a triangular structure that will recur continually between the two men and Barbara from these scenes onward. Undershaft will make a remark intended to win his daughter's favor, for example, "Genuine unselfishness is capable to anything my dear." Barbara will take the remark in earnest and Cusins will deliver an aside on Undershaft's fiendishness. Thus, Cusins bears witness to Barbara's Mephistophelean seduction, the innocent's unknowing conversion to Undershaft's gospel. Though the initial bargain remains the one between father and daughter, the impish son-in-law stands alongside to follow what is transpiring. In doing so, Cusins is the figure that receives and revels in Undershaft's irony, an irony that wreaks havoc in the morality of his interlocutors. This "ecstasy of mischief," experienced from the position of the voyeur, seduces Cusins.