Present: . W.J. Bennett

R.T. Birks, K.C.
Dr. W.F. James
J.A. MacAulay, K.C.
F.D. Reid
C.G. Williams

In Attendance:

H.H. Haydon

U.S. Atomic Energy Commission New Contract

Mr. Bennett advised the meeting that deliveries on the current contract with the U.S. Atomic Energy Commission would be completed as of December 31st, 1949. It was, therefore, proposed to enter into a new contract. In considering the quantity that should be offered for sale, an endeavour had been made to work out a balanced delivery for the period of the next three years, commencing January 1st, 1950. In order to accomplish this, it was Mr. Bennett's recommendation that the new contract should be for a quantity of 450,000 lbs. Mr. Bennett advised the meeting that he had had preliminary discussions with the U.S. Atomic Energy Commission both with respect to quantity and price. The Commission was agreeable to the purchase of 450,000 lbs. With respect to price, Mr. Bennett advised the meeting that since the last contract had been signed, the Canadian dollar had been devalued by 10%. Mr. Bennett recalled to the meeting that the Uranium Black Oxide price under the current contract is $15.00 (Can. funds) which is being paid by the U.S. Atomic Energy Commission in equivalent United States dollars. This method of payment had been developed at the time of the renegotiation of Contract T 86. Under the original terms of that contract, payment was provided for in United States funds which were then at a premium. When the Canadian dollar went to par, the Company was faced with the possible loss of the premium inasmuch as its costs for selling purposes had been determined on the basis of the premium. The new clause was developed for future contracts in order to protect the company in the future against a similar contingency. Mr. Bennett pointed out that while the clause did protect the company from loss, it did not prohibit the U.S. Atomic Energy Commission from benefiting through the devaluation of the Canadian dollar. As a consequence, the balance of payments on the current contract were being made at the rate of approximately $13.50 (U.S. funds). It might be argued that in the next contract the Company should insist on payment at the rate of $15.00 (U.S. funds) which would result in a return of approximately $16.50 (Can. funds) per lb. Mr. Bennett pointed out that such an argument overlooked the fact that when the $15.00 price was negotiated there was considerable opposition to increasing the price from $13.50 to $15.00. The increase had only been agreed to when the Company outlined in general terms its costs. Since these costs had been stated in terms of Canadian dollars, it would be difficult at this juncture to ask for a price of $16.50 (Can. funds) per lb., unless of course it could be shown that costs had increased by $1.50 per lb. It was Mr. Bennett's view, therefore, that it would be a mistake to ask for $15.00 per lb. (U.S. funds). He did propose, however, to ask for some increase, since it could be anticipated that costs, particularly at the Refinery, would increase, due to devaluation. Mr. Bennett asked for the Board's approval of his entering into negotiations with the U.S. Atomic Energy Commission for the sale of 450,000 lbs at a price of $15.51 (Can. funds), or $14.50 (U.S. funds).

WHEREUPON on motion duly made and seconded it was unanimously resolved

THAT Mr. W.J. Bennett be and he is hereby authorized to negotiate and conclude a contract with the U.S. Atomic Energy Commission for the delivery of 450,000 lbs of Uranium Black Oxide with the same specifications and on the same general conditions as the present contract, at a price of $15.51 (Can. funds) or such other price as he at his discretion might decide.⁵⁶

There being no further business, the meeting then adjourned.

⁵⁶ Note marginale:/Marginal note:
We can't object to this; as long as there are no negro units. L.B.P[earson] [August 29, 1950].