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Britain and France were again at war in 1792. This time the British were attempting to stop the The French Revolution from spreading and restore the French monarchy. In this attempt, Britain had blockaded Continental Europe from trade.

During this blockade, the British would seize neutral American ships. The Jay Treaty of 1794 relieved the tensions between the United States and Britain. The Franco-British war also affected American politics.

The French government, bitterly angered by the Jay Treaty, revoked the Franco-American commercial treaty of 1778 and issued the decree of 1796. In the eyes of the French government, the United States had not kept its agreement with France, and they refused to receive the American minister, Charles C. Pinckney. They also began to seize American ships. These events would lay down the groundwork for the XYZ Affair in 1797. 

John Adams, wishing to avoid open war, sent a delegation to France. This delegation was to work out the problems and conclude a treaty. The three members of this delegation were Elbridge Gerry, Charles Cotesworth Pinckney, and John Marshall.

Three anonymous Frenchmen approached the delegation and demanded a gift of 250,000 dollars to Talleyrand, the French foreign minister, and a loan of ten million dollars to France before the French government would ever see them. The Americans were unwilling and unable to produce the money and broke off the negotiations.

When the dispatches, calling the Frenchmen X, Y, and Z reached the United States, Adams sent an account to Congress. In his account, Adams declared that he would not send another minister unless properly and respectably received by the French government.

This account produced an outburst of popular anger against France. The published dispatches angered the United States to the point of starting a war. France eventually gave in, and settled the matter by treaty in 1800.