The XYZ Affair (1797-1798) played a major role in creating a Franco-American Quasi War. The incident involved three French ministers (named by John Adams as X, Y, and Z) and the American delegation in France.
Relations with France had cooled since the end of American Revolution. When France and Britain went to war in 1793, it strained Franco-American relations. Citizen Edmond Charles Genet, the French minister to America, interfered with American neutrality when he outfitted American privateers to capture British ships and wanted American help to take Spanish Louisiana, all activities that ended with his recall in 1793. Britain and the U.S. signed the Jay Treaty (1794) that France saw as unfair to French trade. Since the war with France, the British depended more on neutral American shipping. By 1796, France started seizing American ships and the French government refused to receive the American minister, Charles C. Pinckney, who ended up escaping to the Netherlands for fear of arrest in February 1797. President John Adams called a special session of Congress in May, and on May 16, 1797, Adams sent a message to Congress supporting the build up of defenses. However, Adams also decided to send a delegation to France to improve relations.
Adams sent Charles C. Pinckney (who was already in Europe), Elbridge Gerry, and John Marshall to France in 1797. Their instructions included getting France to accept the Jay Treaty, revise the 1778 treaty, so U.S. would not need to guarantee French holdings in the West Indies and not use U.S troops in France's war with England, and recover damages from French privateering and unpaid claims of supplies with the French government. If France simply accepts Jay's Treaty, then the whole compensation element would be dropped. Also, the U.S. should not authorize a loan while France and Britain were at war, and should not negotiate something that was inconsistent with other existing treaties, or restrict trade already protected by the law of nations.
In France, Talleyrand became Foreign Minister in July 1797. In September, a coup by more radical Directory officials changed the political environment. This new Directory was more hostile to the Federalists than the one they deposed. In large part due to French victories on the battlefield, the French government displayed hubris toward neutral countries like Spain, the Netherlands, and the United States. Although Talleyrand wanted good relations with the U.S., he planned to dictate terms, not to rush any negotiations, and to share in profits.
Thomas Jefferson also did not support quick negotiations, nor did he support Adams' language and actions up to this point. He writes, "the nomination of the envoys to France does not prove a thorough conversion to the pacific system."1 Jefferson's grand plan was for France to win the war against England, and "the best anchor of our hope is an invasion of England, if they republicanize that country, all will be safe with us..."2
By October 1797, the American ministers in France found themselves working with intermediaries. The first to arrive was Jean Conrad Hottinguer (X) and he had a message from Talleyrand that certain conditions must be met in order to officially receive the American envoys. The first condition was that the Directory would need to refute Adams' anti-French sentiment in the May 16 speech to Congress. Second, they must give Talleyrand 1,200,000 livres (50,000 pounds or 250,000 dollars), which was common practice in French diplomacy. Third, France would not be held liable for damages done by French privateers, and the U.S. must guarantee a large French loan. (Two of the French intermediaries were bankers, and would make a large profit from the U.S. loan.) By the next day, these conditions were put down on paper for the Americans. Soon after, Pierre Bellamy (Y) came with Hottinguer and with a French translation of Adams' May speech and re-stated the terms in order to meet with Tallyrand.
On October 22, John Marshall wrote long dispatches about these events. When news reached Paris about Austria's defeat, Talleyrand and the French government began to threaten the U.S. envoys. Talleyrand didn't understand why the initial terms were not met as with other European countries, so he sent his friend, Lucien Hauteval (Z) with Hottinguer to try once again. The two demanded the terms be met or there could be war. Hottinguer asked about Talleyrand's money. According to Marshall's journal (October 27), Pinckney states, "No, no, not a sixpence."
On October 28, Talleyrand unofficially met with Gerry and discussions went nowhere. Gerry stated that one of them could go home for instructions regarding a loan but that was the best he could offer. On October 29, Hottinguer returned to reply that if they paid the bribe, one of the envoys could go home to get further instructions, but the Directory would not officially see the envoys. On October 30, Bellamy threatened the envoys with the wrath of French power. Gerry said not to bother offering the same French conditions. Marshall wrote another long dispatch to Pickering on November 8 and both this one and the dispatch from October 22 would go public in the U.S. Informal talks continued throughout the winter of 1797-1798.
Congress did not enter Philadelphia until November 1797 due to a yellow fever epidemic. Once again, Adams' address to Congress urged a firm hand with France and wanted stronger military defense. However, it was tough to pass anything due to the Republican members of Congress. Many people in and out of government including Jefferson were in the dark about what was happening with the mission and many were pessimistic about peace in general. However, Jefferson's hope remained when he writes, "no news yet from our commissioners. but their silence is admitted to augur peace."3 The dispatches arrived on March 4, 1798, and all but one of them were in code. The only letter that could be read said that the American ministers were not being officially received. By March 5, Adams announced to Congress that the mission had failed and that Congress should pass measures to protect our commerce. Adams and his Cabinet were outraged by French actions as more of the dispatches were deciphered. Yet, they did not support a declaration of war. At this point, Adams did not want to make the dispatches public, because he thought that releasing them would endanger the lives of the American ministers and start a war scare. So, he decided to wait it out and try to push for preparedness.
On March 19 1798, Adams asked Congress to arm American vessels, shore up our coastal defenses, and manufacture arms. Jefferson called Adams' message insane.4 In response to the President, Republican House members sent three resolutions (Sprigg resolutions). They supported building up coastal and internal defenses, but not arming the ships. Also, Republicans felt a declaration of war was inexpedient. In a letter to James Madison, Jefferson hoped to stall events for as long as possible. He states, "if we could but gain this season, we should be saved. the affairs of Europe would of themselves relieve us."5
Some Republican members believed that the deciphered parts of the dispatches included the fact that France was ready to negotiate. Congressmen wanted to know what more the ciphered messages said about the situation. The Republican press (which included James Callender) also wanted full disclosure of the dispatches. Debate in Congress began and even Republicans were divided over the issue. By April 2, the House passed a resolution for Adams to publish the dispatches in their entirety. Adams immediately agreed since he knew the dispatches would help his cause for a strong defense, and he felt the American ministers were safely out of France. Thus, on April 3, he released the correspondence and inserting X,Y,Z in for the French names. He asked Congress to examine the documents behind closed doors. The Republicans were amazed by French actions. The Senate quickly voted in favor of publication of the dispatches and they ended up in the newspapers.
This disclosure inflaming public opinion against France and John Adams' popularity rose. The affair also helped the Federalists increase their majority in the House of Representatives in the 1798 elections. Although the incident helped push the military build-up, war was never declared. The French government reversed itself and dropped the demands. By 1800, Adams had forged the Treaty of Morfontaine with France to restore peace. John Adams knew that a war with France would be suicide for the United States.
As for Jefferson, he did not enter the public discussions of the XYZ Affair, but it did not stop him from commenting about them with his close friends. He writes to James Madison that the actions of the French "...were very unworthy of a great nation..." but "...these papers do not offer one motive the more for our going to war..."6 To Jefferson, he wasn't so sure if the Directory knew of Talleyrand's plot and never liked how the XYZ affair was used for political gain. Jefferson writes as late as 1799, "you know what a wicked use has been made of the French nogociation: and particularly of the XYZ dish cooked up by Marshall, where the swindlers are made to appear as the French government."7 For Jefferson, it wasn't always easy to shake his romantic notions of his time in France and the early ideals of the French Revolution.