<P> The XYZ Affair was a political and diplomatic episode in 1797 and 1798, early in the administration of John Adams, involving a confrontation between the United States and Republican France that led to an undeclared war called the Quasi-War . The name derives from the substitution of the letters X, Y and Z for the names of French diplomats Hottinguer (X), Bellamy (Y), and Hauteval (Z) in documents released by the Adams administration . </P> <P> An American diplomatic commission was sent to France in July 1797 to negotiate 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 Talleyrand, who demanded bribes and a loan before formal negotiations could begin . Although such demands were not uncommon in mainland European diplomacy of the time, the Americans were offended by them, 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 ground work for the eventual end to diplomatic and military hostilities . </P>

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