Diplomatic incident that, when made public in 1798, nearly involved the United States and France in war. Pres. John Adams dispatched three ministers to France in 1797 to negotiate a commercial agreement to protect U.S. shipping.
In Paris the ministers were approached by three French agents who suggested a bribe of $250,000 to Talleyrand, the French foreign minister, and a loan of $10,000,000 to France as a prelude to negotiations.
In April 1798 the machinations of the three French agents (called X, Y, and Z in the diplomatic correspondence) were made public in the United States. There was a great outcry over the bribe solicitation, followed by preparations for war. Although a period of undeclared naval warfare ensued between France and the United States formal war was avoided, and the incident was settled by the Convention of 1800.
Alien and Seditions Acts - 1798
Four internal security laws passed by the U.S. Congress, restricting aliens and curtailing the excesses of an unrestrained press, in anticipation of an expected war with France.
After the XYZ Affair (1797), war appeared inevitable. Federalists, aware that French military successes in Europe had been greatly facilitated by political dissidents in invaded countries, sought to prevent such subversion in the United States and adopted the Alien and Sedition Acts as part of a series of military preparedness measures.
The three alien laws, passed in June and July, were aimed at French and Irish immigrants, who were mostly pro-French.
These laws raised the waiting period for naturalization from 5 to 14 years, permitted the detention of subjects of an enemy nation, and authorized the chief executive to expel any alien he considered dangerous.
The Sedition Act (July 14) banned the publishing of false or malicious writings against the government and the inciting of opposition to any act of Congress or the president—practices already forbidden by state statutes and the common law but not by federal law.
The federal act reduced the oppressiveness of procedures in prosecuting such offenses but provided for federal enforcement.
The acts were the mildest wartime security measures ever taken in the United States, and they were widely popular.
Jeffersonian Republicans vigorously opposed them, however, in the Virginia and Kentucky Resolutions, which the other state legislatures either ignored or denounced as subversive.
Only one alien was deported, and only 25 prosecutions, resulting in 10 convictions, were brought under the Sedition Act.
With the war threat passing and the Republicans winning control of the federal government in 1800, all the Alien and Sedition Acts expired or were repealed during the next two years
Source
Encyclopedia Britannica