Such was the slowness of communication in those days that, when Congress reassembled at the regular session in November, no decisive news had arrived of the fate of the special mission. Adams with proper prudence thought it would be wise to consider what should be done in case of failure. On January 24, 1798, he addressed to the members of his Cabinet a letter requesting their views. No record is preserved of the replies of the Secretaries of State and of the Treasury. Lee, the Attorney-General, recommended a declaration of war. McHenry, the Secretary of War, offered a series of seven propositions to be recommended to Congress: 1. Permission to merchant ships to arm; 2. The construction of twenty sloops of war; 3. The completion of frigates already authorized; 4. Grant to the President of authority to provide ships of the line, not exceeding ten, "by such means as he may judge best." 5. Suspension of the treaties with France; 6. An army of sixteen thousand men, with provision for twenty thousand more should occasion demand; 7. A loan and an adequate system of taxation.
These recommendations are substantially identical with those made by Hamilton in a letter to Pickering, and the presumption is strong that McHenry's paper is a product of Hamilton's influence, and that it had the concurrence of Pickering and Wolcott. The suggestion that the President should be given discretionary authority in the matter of procuring ships of the line contemplated the possibility of obtaining them by transfer from England, not through formal alliance but as an incident of a coöperation to be arranged by negotiation, whose objects would also include aid in placing a loan and permission for American ships to join British convoys. This feature of McHenry's recommendations could not be curried out Pickering soon informed Hamilton that the old animosities were still so active "in some breasts" that the plan of cooperation was impracticable.
Meanwhile the composite mission had accomplished nothing except to make clear the actual character of French policy. When the envoys arrived in France, the Directory had found in Napoleon Bonaparte an instrument of power that was stunning Europe by its tremendous blows. That instrument had not yet turned to the reorganization of France herself, and at the time it served the rapacious designs of the Directory. Europe was looted wherever the arms of France prevailed, and the levying of tribute both on public and on private account was the order of the day. Talleyrand was the Minister of Foreign Affairs, and he treated the envoys with a mixture of menace and cajolery. It was a part of his tactics to sever the Republican member, Gerry, from his Federalist colleagues. Gerry was weak enough to be caught by Talleyrand's snare, and he was foolish enough to attribute the remonstrances of his colleagues to vanity. "They were wounded," he wrote, "by the manner in which they had been treated by the Government of France, and the difference which had been used in respect to me." Gerry's conduct served to weaken and delay the negotiations, but he eventually united with his colleagues in a detailed report to the State Department, which was transmitted to Congress by the President on April 3, 1798. In the original the names of the French officials concerned were written at full length in the Department cipher. In making a copy for Congress, Secretary Pickering substituted for the names the terminal letters of the alphabet, and hence the report has passed into history as the X.Y.Z. dispatches.
The story, in brief, was that on arriving in Paris the envoys called on Talleyrand, who said that he was busy at that very time on a report to the Directory on American affairs, and in a few days would let them know how matters stood. A few days later they received notice through Talleyrand's secretary that the Directory was greatly exasperated by expressions used in President Adams's address to Congress, that the envoys would probably not be received until further conference, and that persons might be appointed to treat with them. A few more days elapsed, and then three persons presented themselves as coming from Talleyrand. They were Hottinguer, Bellamy, and Hauteval, designated as X.Y.Z. in the communication to Congress. They said that a friendly reception by the Directory could not be obtained unless the United States would assist France by a loan, and that "a sum of money was required for the pocket of the Directory and Ministers, which would be at the disposal of M. Talleyrand." This "douceur to the Directory," amounting to approximately $240,000, was urged with great persistence as an indispensable condition of friendly relations. The envoys temporized and pointed out that their Government would have to be consulted on the matter of the loan. The wariness of the envoys made Talleyrand's agents the more insistent about getting the "douceur." At one of the interviews Hottinguer exclaimed:— "Gentlemen, you do not speak to the point; it is money; it is expected that you will offer money." The envoys replied that on this point their answer had already been given. "'No,' said he, 'you have not: what is your answer?' We replied, 'It is no; no; not a sixpence.'" This part of the envoys' report soon received legendary embellishment, and in innumerable stump speeches it rang out as, "Not one cent for tribute; millions for defense!"
The publication of the X.Y.Z. dispatches sent rolling through the country a wave of patriotic feeling before which the Republican leaders quailed and which swept away many of their followers. Jefferson held that the French Government ought not to be held responsible for "the turpitude of swindlers," and he steadfastly opposed any action looking to the use of force to maintain American rights. Some of the Republican members of Congress, however, went over to the Federalist side, and Jefferson's party was presently reduced to a feeble and dispirited minority. Loyal addresses rained upon Adams. There appeared a new national song, Hail Columbia, which was sung all over the land and which was established in lasting popularity. Among its well-known lines is an exulting stanza beginning:
"Behold the chief who now commands,
Once more to serve his country stands."
This is an allusion to the fact that Washington had left his retirement to take charge of the national forces. The envoys had been threatened that, unless they submitted to the French demands, the American Republic might share the fate of the Republic of Venice. The response of Congress was to vote money to complete the frigates, the United States, the Constitution, and the Constellation, work on which had been suspended when the Algerine troubles subsided; and further, to authorize the construction or purchase of twelve additional vessels. For the management of this force, the Navy Department was created by the Act of April 30, 1798. By an Act of May 28, the President was authorized to raise a military force of ten thousand men, the commander of which should have the services of "a suitable number of major-generals." On July 7, the treaties with France that had so long vexed the United States were abrogated.
The operations of the Navy Department soon showed that American sailors were quite able and willing to defend the nation if they were allowed the opportunity. In December, 1798, the Navy Department worked out a plan of operations in the enemy's waters. To repress the depredations of the French privateers in the West Indies, a squadron commanded by Captain John Barry was sent to cruise to the windward of St. Kitts as far south as Barbados, and it made numerous captures. A squadron under Captain Thomas Truxtun cruised in the vicinity of Porto Rico. The flagship was the frigate Constellation, which on February 9, 1799, encountered the French frigate, L'Insurgente, and made it strike its flag after an action lasting only an hour and seventeen minutes. The French captain fought well, but he was put at a disadvantage by losing his topmast at the opening of the engagement, so that Captain Truxtun was able to take a raking position. The American loss was only one killed and three wounded, while L'Insurgente had twenty-nine killed and forty-one wounded. On February 1, 1800, the Constellation fought the heavy French frigate Vengeance from about eight o'clock in the evening until after midnight, when the Vengeance lay completely silenced and apparently helpless. But the rigging and spars of the Constellation had been so badly cut up that the mainmast fell, and before the wreck could be cleared away the Vengeance was able to make her escape. During the two years and a half in which hostilities continued, the little navy of the United States captured eighty-five armed French vessels, nearly all privateers. Only one American war vessel was taken by the enemy, and that one had been originally a captured French vessel. The value of the protection thus extended to American trade is attested by the increase of exports from $57,000,000 in 1797 to $78,665,528 in 1799. Revenue from imports increased from $6,000,000 in 1797 to $9,080,932 in 1800.
The creation of an army, however, was attended by personal disagreements that eventually wrecked the Administration. Without waiting to hear from Washington as to his views, Adams nominated him for the command and then tried to overrule his arrangements. The notion that Washington could be hustled into a false position was a strange blunder to be made by anyone who knew him. He set forth his views and made his stipulations with his customary precision, in letters to Secretary McHenry, who had been instructed by Adams to obtain Washington's advice as to the list of officers. Washington recommended as major-generals, Hamilton, C.C. Pinckney, and Knox, in that order of rank. Adams made some demur to the preference shown for Hamilton, but McHenry showed him Washington's letter and argued the matter so persistently that Adams finally sent the nominations to the Senate in the same order as Washington had requested. Confirmation promptly followed, and a few days later Adams departed for his home at Quincy, Massachusetts, without notice to his Cabinet. It soon appeared that he was in the sulks. When McHenry wrote to him about proceeding with the organization of the army, he replied that he was willing provided Knox's precedence was acknowledged, and he added that the five New England States would not patiently submit to the humiliation of having Knox's claim disregarded.
From August 4 to October 13, wrangling over this matter went on. The members of the Cabinet were in a difficult position. It was their understanding that Washington's stipulations had been accepted, but the President now proposed a different arrangement. Pickering and McHenry wrote to Washington explaining the situation in detail. News of the differences between Adams and Washington of course soon got about and caused a great buzz in political circles. Adams became angry over the opposition he was meeting, and on August 29 he wrote to McHenry that "there has been too much intrigue in this business, both with General Washington and with me"; that it might as well be understood that in any event he would have the last say, "and I shall then determine it exactly as I should now, Knox, Pinckney, and Hamilton." Washington stood firm and, on September 25, wrote to the President demanding "that he might know at once and precisely what he had to expect." In reply Adams said that he had signed the three commissions on the same day in the hope "that an amicable adjustment or acquiescence might take place among the gentlemen themselves." But should this hope be disappointed, "and controversies shall arise, they will of course be submitted to you as commander-in-chief."