The XYZ Affair was a diplomatic episode that worsened relations between France and the United States and led to the undeclared Quasi-War of 1798. The Jay Treaty of 1795 angered France, which was at war with Britain and interpreted the treaty as evidence of an alliance between Great Britain and the United States. President John Adams and his Federalist Party had also been critical of the tyranny and extreme radicalism of the French Revolution, further worsening relations between France and the United States.
The French captured almost three hundred US ships bound for British ports in the Atlantic, the Mediterranean and the Caribbean. Leaders of the Federalist Party like Alexander Hamilton asked to declare war, but President Adams, also a federalist, sent a diplomatic delegation (Charles Cotesworth Pinckney, John Marshall and Elbridge Gerry) to Paris in 1797 to negotiate peace. Three French agents, Jean Conrad Hottinguer, Pierre Bellamy and Lucien Hauteval, demanded payment of a large bribe to allow the delegation to speak with the French Foreign Minister Charles Maurice de Talleyrand-Périgord, a huge loan to help finance the French wars as a condition for continuing negotiations, and an official apology for the comments made by Adams. The Americans broke the negotiations and returned to their country. Jefferson supporters believed that the American delegates were to blame for the failure and demanded to see the key documents. Adams made public the report of the delegation - with the names of the French agents exchanged for X, Y, and Z, from which the case and correspondence took its name - blowing up a wave of sentiment against the French.
That this sovereign nation refused to negotiate with the accredited representatives of the United States or even receive them without bribes for its main members and a loan for the nation's military incursions in Europe, seemed an extreme insult to the Americans. The public learned that the delegates had rejected the demands. "The answer is no! No, not sixpence!" was his response, relayed by newspaper editors as "Millions for defense, but not one cent for tribute!".
The United States had offered France many of the same provisions that were found in the Jay Treaty with Great Britain, but France reacted by sending Marshall and Pinckney to their country. Gerry remained in France, thinking that he would be able to prevent a declaration of war, but officially he did not negotiate any more.
The Quasi-War broke out (1798-1800), with US and French warships and merchant ships fighting in real combat in the Caribbean and off the coasts of the United States (it was called "quasi" because there was no official declaration of war). The United States abrogated the Alliance Treaty they had with France. Adams began to strengthen the navy, and a new army was recruited. The total war seemed to be very close, but Adams appointed new diplomats headed by William Murray. They negotiated the end of hostilities through the Treaty of Mortefontaine. The XYZ case significantly weakened the affection Americans had for France.
