You may recall that this division informed you some weeks ago that Mr. Bennett had sent to the U.S. Atomic Energy Commission a copy of a draft agreement? for cooperation on the civil side of atomic energy. In a telephone conversation today Mr. Bennett informed Barton of this division that General Nichols, the General Manager of U.S. Atomic Energy Commission, had sent to Mr. Bennett informally a U.S. version of the draft agreement.? Bennett told Barton that after studying the U.S. draft he had talked to Nichols on the telephone and informed him that in its present form it was quite unacceptable. Bennett proposes to go to Washington in the course of the next week or ten days, when General Nichols indicates that it is convenient, to discuss the draft with him in detail. He mentioned in particular two points in the agreement which were unsatisfactory. The first was that it excluded any information which had "military significance". If this were interpreted literally it would exclude any information on radiological effects, health and safety, detection methods, etc. The second point that Bennett found unacceptable was that information on specific types of power reactors would be given only if Canada were building or were planning to build the same type of reactor. Since the basis of the Canadian plan is to compare the performance of the Canadian heavy water reactor with the other types being made in the United States in order to determine relative efficiencies, this condition would largely nullify the value of the agreement.

2. Bennett then said that he was slated to make a speech in Ottawa about the middle of February and if progress had not been made by that time he was giving some thought to chiding the Americans publicly. Presumably before doing this Bennett would check at least with his own Minister, if not with this department.

3. Barton then told Bennett of Mr. Bryce's illness and asked Bennett if he had thought of discussing these developments with the Advisory Panel on Atomic Energy. Bennett thought that there would not be much point in discussing the matter with the Panel until he had met with Nichols and learned how firmly wedded the Americans were to those features of the U.S. draft agreement which were unacceptable to Atomic Energy of Canada Limited.

4. Bennett concluded the discussion by inviting Barton to go over to his office and have a look at the U.S. draft agreement. If a study of the draft reveals any further features of interest I will send you a further memorandum.

J. TEAKLES