Secretary Rusk and I saw Lord Hood last night and the Secretary told him the following:
1. The United States Government, in the Secretary's judgment, had an obligation to inform the U.K. if its mind should change on Hawks. This was done Friday. The Secretary does not consider that there was an obligation to consult before making a decision.
2. The Secretary was sorry that the information conveyed on Friday did not include explanations of the urgency of the Feldman mission and its relation to the Johnson plan. He explained the whole Feldman package and Lord Hood indicated that it should make a very considerable difference in London's reaction.
3. The Secretary said that Feldman was in no sense attempting to close a Hawk deal and that there would be every opportunity for the British to attempt to sell Bloodhounds. He said that from a political point of view, a British sale would be preferable. (In saying this, he was well aware of technical estimates of DOD that the Hawk is a much better missile and he also knew that the Israelis would much prefer to deal with us.) The Secretary pointed out, however, that any missiles sold to the Israelis would in the end be paid for by public or private U.S. dollars.
4. The Secretary and I both expressed our belief that you would be astonished by the tone of the Prime Minister's message, which the Secretary showed to Lord Hood, who had not seen it. We indicated that you probably would not answer until you return from the West Coast, and hinted strongly that it would be helpful if a message in a different tone could be received before that time. The Secretary remarked that when a married couple begin to talk about divorce, it is already too late, and he pointed out that it would not have been good for our relations with the U.K. if we had resorted to parallel language in such cases as the Congo and nuclear testing.
A message has gone to Feldman to make sure that he sticks to his instructions, which already provide that he should not go beyond indicating that the path to a sale of Hawks is now open in principle, subject to the possibility of arms control arrangements in the area. A copy of this message follows.
I do not have all the evidence on what went wrong here, but I think the Secretary would agree that communication with the British was at too low a level and too limited in scope this week. Still it is clear that there was no justification for the violence of the Prime Minister's explosion, and it is also clear that the way is now open for perfectly fair competition. The rub, of course, is that the British will not win. Nothing is harder for a merchant's feelings than to have to market a second-best product against alert competition.