The Jay Treaty of 1794
With the signing of the Treaty of Paris of 1781, the United States not only gained its independence, but also defined its future relationship with Great Britain. Once out of the empire, the American nation struggled to establish itself as an economic power at home and as a carrier of world maritime trade. Unfortunately, the Navigation Acts that had once fostered and encouraged American shipping to British ports now forbade the new nation to trade freely with British possessions. Furthermore, under the Articles of Confederation, the Continental Congress had no power of taxation. With limited means of raising revenue, U.S. debt grew dramatically. The standing Continental Army was quickly disbanded. By 1785, the ships of the Continental Navy had all been sold or given away, and the naval force of the United States, with the exception of a handful of revenue cutters, ceased to exist.
The precarious state of the nation's economy and its limited means of enforcing its authority by use of military force put the United States in the embarrassing situation of not being able to assert itself in the theater of international diplomacy. Perhaps most damaging was its failure to ensure British compliance with the provisions of the Treaty of Paris of 1783 or to negotiate a satisfactory trade agreement with the British Empire.
Under the Treaty of Paris, the western border of the United States had been established at the eastern shores of the Mississippi River. However, ten years after American independence, British troops were still occupying portions of the Ohio Valley. Outstanding debts owed to the United States by the British and outlined in the treaty had gone unpaid. American shipping was essentially barred from ports under British control, and by 1794, British ships were seizing American vessels trading in the French West Indies on the grounds that such trade violated the British Orders in Council that prohibited neutral nations from trading with French ports.
In exasperation, President Washington dispatched Supreme Court Chief Justice John Jay to England to negotiate a peaceful resolution to Britain's lack of adherence to the peace treaty and to enact a trade agreement that would allow American ships to trade in English ports. The result of his efforts was Jay's Treaty of 1794.
Under the provisions of the Jay Treaty, the British agreed to remove royal troops from the western frontiers of the United States and to establish a commission to examine the debts owed to the United States. In the area of trade, the British agreed to open a limited number of ports to American trade, most notably the British East Indies. These clauses proved profitable to the United States, but the British also dictated certain articles that, once accepted, would nullify portions of the Treaty of Commerce and Amity with France signed in 1778. Most notable of these points was the British insistence that privateers belonging to nations that were at war with England be forbidden to arm themselves or sell their prizes in American ports. Hostile privateers would also be limited in the amount of provisions they would be allowed to purchase while in American territory. Jay's Treaty further stipulated that the United States would agree to do all in its power to prevent British ships from being taken by an enemy vessel within "cannon shot of its coasts."
To the French, the American ratification of Jay's Treaty seemed to violate the previous treaties signed between the United States and France. France responded by acting on Article 27 of the Treaty of Commerce and Amity, which required that when either the United States or France was at war, the merchant ships of both nations must provide detailed certificates giving the nationalities of masters and crew, as well as descriptions of cargo and points of origin and destination. Failure to provide these certificates justified taking the ship. American vessels seldom sailed with such detailed papers, and in 1795 France seized more than 300 American merchant ships, which in turn were sold as prizes in French courts. By 1797, the United States and France teetered on the edge of war.