XYZ Affair

An American diplomatic commission was sent to France in July 1797 to negotiate a solution to problems that were threatening to break out into war. The diplomats, Charles Cotesworth Pinckney, John Marshall, and Elbridge Gerry, were approached through informal channels by agents of the French foreign minister, Charles Maurice de Talleyrand-Périgord, who demanded bribes and a loan before formal negotiations could begin. Although it was widely known that diplomats from other nations had paid bribes to deal with Talleyrand at the time, the Americans were offended by the demands, and eventually left France without ever engaging in formal negotiations. Gerry, seeking to avoid all-out war, remained for several months after the other two commissioners left. His exchanges with Talleyrand laid groundwork for the eventual end to diplomatic affairs and military hostilities.
The failure of the commission caused a political firestorm in the United States when the commission's dispatches were published. It led to the undeclared Quasi-War (1798–1800). Federalists, who controlled both houses of Congress and held the presidency, took advantage of the national anger to build up the nation's military. They also attacked the Democratic-Republicans for their pro-French stance, and Gerry (a nonpartisan at the time) for what they saw as his role in the commission's failure. Provided by Wikipedia
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