XYZ Affair
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In the 1797 diplomatic squabble known as the XYZ Affair, hostilities erupted between the new American republic and its most powerful European ally: France. America's friend throughout the Revolutionary War and then during its own rebellion against monarchy, France now demanded bribes and engaged in boorish behavior that was deemed an affront to American national pride. That French-American quarrel in the diplomatic field was soon followed by a veiled, but violent, war on the open seas, often referred to as the "Quasi-War." Though long overshadowed by the momentous events that preceded and followed, the XYZ Affair played a powerful role in defining the new American nation's standing in the world community, in the creation of the U.S. Navy, as well as in deepening the rivalry between America's two main political parties: the Federalists and the Democratic-Republicans.

Relations between Great Britain, France, and the United States were complicated following the American Revolution. Great Britain, despite the 13 colonies' revolt and founding as an independent nation, occupied a special place in both the history and hearts of many Americans. Some members of the Federalist Party, for example, were pro-English and believed that alliance with the former homeland was the key to success. Conversely, the American rebels had possessed no ally more steadfast than France, Britain's longtime enemy. Support for France, especially the new French republic, was strong with many Americans, particularly those in the Jeffersonian camp—which was comprised of adherents of the Democratic-Republican Party led by Thomas Jefferson.

The United States and France had entered into an alliance in 1778 following the American victory in the Battle of Saratoga through the shrewd influence of Benjamin Franklin, then ambassador to France. Not everyone was thrilled with the pact, but the colonists desperately needed help if they were to be victorious over Great Britain. That alliance remained in effect but became a problem as the international situation evolved. Not long after the French deposed their king in 1789, France became embroiled in another war with Britain. A number of Democratic-Republicans wished to aid their old ally against an old enemy, but President George Washington, having assessed the state of the nation, decided on a policy of neutrality. The United States was weak economically and militarily, and any war would be expensive. Moreover, while many Americans supported the overthrow of French king Louis XVI, the radical turn taken by the French Revolution and the ensuing bloodshed did not appeal to them.

At the beginning of his second term in office, Washington issued the Proclamation of Neutrality (1793), declaring his government's intention of staying out of the European conflict. That same year, Edmond Charles Genet, known more commonly as "Citizen Genet," landed in America as emissary of France. He quickly set about drumming up support for the French cause. Genet even went so far as to outfit ships as privateers and encourage attacks on Spanish Florida. Well received by the Democratic-Republicans, Genet gained a number of supporters but found himself in hot water with Washington. The president demanded that France recall their ambassador, but by the time Genet could have left for France, his political party, the Girondists, had fallen from power. Forcing Genet to return home would have been tantamount to a death sentence, something Washington could not stomach. Consequently, Genet remained in the United States, marrying the daughter of the governor of New York; he eventually became a farmer and a U.S. citizen.

Pro-English elements aligned with the Federalist Party, while pleased with the Neutrality Proclamation, were less happy about British abuse along the American border. Not only were Native American allies of Great Britain harrying frontier settlements, but English warships were also seizing American merchant vessels in the West Indies. Worse, American sailors, through impressment, were forced into serving the English Navy. Such abuses hardly complimented a relationship supposedly centered on neutrality. Public outcry against English abuses was naturally fierce. The Jeffersonians of the Democratic-Republican Party were already eager to help the French and used that abuse as another reason to urge war against Britain.
Still convinced that neutrality was vital, Washington dispatched John Jay to Great Britain in 1794 to renegotiate, but he met with little success. Undermined by pro-English sentiment at home, Jay gained only limited reparations for stolen ships and British promises to vacate forts on the northwestern border. Alexander Hamilton had secretly informed the British of American desires, which gave British foreign minister Lord William Grenville the upper hand in the deliberations. Jay was compelled to agree to terms largely set by the British. While Jay's treaty avoided the war so feared by Washington and Hamilton, it enraged the the Democratic-Republicans, who believed Jay had sold out his country. War was a threat all the more as a result, and only the prestige of Washington ensured a passing vote in Congress that avoided hostilities.

The Jay Treaty, as it came to be called, also angered the French, who were already disappointed by a lack of American aid in their own revolution. The French saw changes in American attitudes and policy as tantamount to breaking the Treaty of 1778. Subsequent American action and compliance with the neutrality reaffirmed by the Jay Treaty seemed to prove them right. The United States, for example, closed its ports to French ships. To punish the United States for its lack of support, French ships began capturing American merchant ships. By 1797, they had apprehended close to 300 vessels.

While the French Navy was preying on American shipping, the United States elected a new president, John Adams. Like his predecessor, Adams desired to avoid war and remain neutral. Among other actions undertaken to ensure a course of peace, he enacted the highly unpopular Alien and Sedition Acts (1798). The acts sought to curb the agitation of pro-French elements in the United States and punish those who aided them. Hoping to patch up the relationship with France, President Adams sent John Marshall and Elbridge Gerry to Paris in 1797 to team up with Charles Cotesworth Pinckney, the same man Washington had sent earlier and who had received a cold welcome from the French government.

The envoys wished to meet Charles Maurice de Talleyrand, France's foreign minister, but were headed off by French agents. Known later as "X," "Y," and "Z," these agents—Jean Conrad Hottinguer, Lucien Hauteval, and a Mr. Bellamy—sought a loan of some $10 million and an enormous bribe of $250,000 just for the privilege of talking with Talleyrand. The bribe would ensure nothing else—not a single concession that the American envoys desired. Not surprisingly, the Americans were unamused and unwilling to pay such a sum without any guarantee that the money would help their cause. The French did not budge. Negotiations came to a halt. Marshall and Pinckney sailed back to the United States in 1798, while Gerry remained behind. Marshall and Pinckney were greatly admired for not giving in to the ridiculous demands of the French, and the Federalists gained points politically.

Anti-French feeling rose, and the Adams administration began to prepare for war. Adams did not desire war, nor did the Jeffersonian party, and Talleyrand, too, was not inclined to open hostility. Regardless of those intentions, an undeclared war raged upon the waters of the Atlantic and in the West Indies. Congress created a Navy Department distinct from the army and requisitioned funds for new boats. The U.S. Navy possessed only three ships at the time. Congress also placed Washington at the head of a new army of 10,000 men who, while sanctioned by the government, never materialized. From 1798 to 1800, the United States and France fought at sea. Losses were heavy, particularly to American merchant ships, hundreds of which became French prizes. The growing U.S. Navy, however, in conjunction with privateers, captured nearly 100 French warships.

The Quasi-War might have escalated into a fully declared war if Talleyrand and Adams had not maintained the status quo. France's revolutionary armies were busy, money was tight, and Talleyrand feared that the naval war might bring the United States and Great Britain closer. Talleyrand made overtures that Adams received well. The president sent new envoys to negotiate with the French, but upon arrival, they found a new government in power. In 1799, Napoleon Bonaparte, whose military prowess had helped him topple the Directory and establish the Consulate (of which he was the nominal head), assumed the leadership of France. His ambitions in Europe led him to conclude a favorable agreement with the United States.

The American envoys—William Vans Murray, Oliver Ellsworth, and William Richardson Davie—succeeded in concluding the Treaty of Mortefontaine on September 30, 1800. That agreement, the "Convention of 1800," recast Franco-American relations. While the U.S. government did not gain payment for losses suffered to its merchant ships, it did acquire freedom from the Treaty of 1778 and an end to the war. Adams was warmly praised for his handling of the affair, which in some ways helped set the stage for a peaceful resolution to another problem: French control of the Louisiana territories. In the 1803 Louisiana Purchase, Jefferson, who was now president, was able to acquire the land from Napoleon, who was desperately in need of money to wage the Napoleonic Wars.

The XYZ Affair highlights the struggles of a young United States. Though politically divided between those who wished to ally themselves with Great Britain and those who favored France, presidents Washington and Adams forcefully maintained a policy of neutrality. That policy gave the nation time to recover from the economic and military disruptions of the revolution and put itself on firm ground. It also gave rise to a sense of isolationism that has remained an important force in American foreign affairs down to the modern era. In addition, the affair and subsequent military confrontations contributed to the image of a redoubtable, proud, and independent nation. That image was popularly summed up in the American envoy's angry words when presented with the French request for a bribe: "No, no, not a sixpence."