The Act was subsequently amended to promote private development of nuclear energy under the Eisenhower administration's Atoms for Peace program in 1954.

In restricting the access to nuclear information to other countries, it created a rift between the United States and its allies, particularly Britain and Canada, which had participated in the Manhattan Project.

[1] In July 1944, Vannevar Bush, James B. Conant and Irvin Stewart produced a proposal for domestic legislation to control nuclear energy.

[4] Harrison brought in two experienced Harvard Law School-educated War Department lawyers, Brigadier General Kenneth Royall and William L. Marbury Jr., to take up the job of drafting the legislation.

It granted the commission broad powers to acquire property, operate facilities, conduct research, regulate all forms of nuclear energy, and administer its own security, administrative and audit regimes.

They would be supported by four advisory boards, for military applications, industrial uses, research and medicine, the membership of which would be restricted to those with technical qualifications.

[11] The secrecy provisions also frightened many scientists; it contained severe penalties of up to ten years imprisonment and $10,000 in fines for security breaches.

The victorious conclusion of World War II gave the armed forces enormous prestige, but there still remained the long-standing American distrust of standing armies, and the tradition of civilian control of the military.

[17] While the bill was being debated, the news broke on February 16, 1946, of the defection of Igor Gouzenko in Canada, and the subsequent arrest of 22 people.

McMahon convened an executive session at which Federal Bureau of Investigation Director J. Edgar Hoover, Secretary of State James F. Byrnes and Groves were called to appear.

All information concerning the design, development and manufacture of nuclear weapons was "restricted data", and regardless of how it was derived or obtained, was considered classified unless it was specifically declassified.

[20] Representative Helen Gahagan Douglas, who sponsored the McMahon Bill in the House,[21] vigorously defended the dissemination provisions of Section 10 against counterarguments.

She dismissed objections that it would "give away the secret of the bomb",[22] asserting that America's advantage in nuclear weapons could only be temporary, whereas the bill could perpetuate its lead in scientific research.

[22] An important addition, known as the Vandenberg Amendment, created a Military Liaison Committee to advise the commission on defense matters.

[26] The restrictions of the act related to secrecy, the control of fissile materials, the ownership of patents and the operation of production facilities placed a number of legal roadblocks in the way of private nuclear power stations.

[30] The Atomic Energy Act of 1954 proved insufficient in its objective of encouraging privately built and run nuclear reactors.

A series of accidents with research reactors, including partial core meltdowns, made private companies cautious, and reluctant to become involved with nuclear energy without protection from liability.

"[34] The McMahon Act fueled resentment from British scientists and Churchill and led to Britain developing its own nuclear weapons.

[35] Lewis Strauss, the Chairman of the Atomic Energy Commission, proposed in January 1958 that the President should be able to share nuclear information with allies that were making "substantial and material contributions to the national defense and security".

Congress amended the Atomic Energy Act of 1954 in June 1958, and America and Britain again began sharing nuclear research under the 1958 US–UK Mutual Defence Agreement.