The so-called XYZ Affair occured at the end of the eighteenth century when the new American nation came into conflict with the French over a diplomatic scandal. The problem derived from the ascension to power of Talleyrand, whose methods of dealing with foreign nations included seeking bribes as a cost of doing business. This was a major ethical issue for the new nation, which was only developing its political culture and the structures within which its government would operate. The XYZ affair would nearly involve America in a war with France, so in no way was this a minor matter. President John Adams was much affected in his administration by this situation.
The basic details of the issue were not in dispute. President Adams sent three ministers to France in 1797 to negotiate a commercial agreement to protect U.S. shipping. The three ministers were approached in Paris by three French agents who suggested a bribe of $250,000 to the French foreign minister, Talleyrand, and a loan of $10,000,000 to France as a prelude to negotiations. This was reported to Washington in dispatches where the three agents were referred to as X, Y, and Z. The matter became public and caused a scandal, with a great deal of outcry over the solicitation for a bribe. There were preparations for war over the matter, and a period of undeclared naval warfare did ensue between France and the United States although no formal war was declared. The incident was finally settled by the Convention of 1800.
The reason for the original diplomatic overture was the problem being encountered for American shipping interests. In the closing days of the Washington administration, the United States signed John Hay's Treaty with Great Britain, negotiated for the United States by Chief Justice John Jay, a former member of the Continental Congress. This treaty angered France because it not only eradicated many of the grievances then existing between Great Britain...