When the French Revolution led to war in 1793 between Britain (America's leading trading partner), and France (the old ally, with a treaty still in effect), Washington and his cabinet decided on a policy of neutrality. Washington supported the [[Jay's Treaty]], designed by Hamilton to avoid war with Britain and encourage commerce. The Jeffersonians vehemently opposed the treaty, but Washington's support proved decisive, and the U.S. and Britain were on friendly terms for a decade.
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The French were openly seizing American ships, leading to an undeclared war known as the [[Quasi-War]] of 1798-99. President [[John Adams]] tried diplomacy; it failed. In 1798, the French demanded American diplomats pay huge bribes in order to see the French Foreign Minister [[Talleyrand]], which the Americans rejected. The Jeffersonian Republicans, suspicious of Adams, demanded the documentation, which Adams released using X, Y and Z as codes for the names of the French diplomats. A wave of nationalist sentiment overwhelmed the U.S. Congress approved Adams' plan to organize the navy. Adams reluctantly signed the Alien and Sedition Act as a wartime measure. Adams broke with the Hamiltonian wing of his [[Federalist Party]] and made peace with France in 1800.