Hamilton also helped Washington draft his famous Farewell Address, which Washington delivered in 1796 when he announced that he would not seek a third term as president. In the Farewell Address addressed several important issues, Washington asked the American people not to divide themselves into political parties, and called upon them to maintain and uphold their republican ideals and morality. Furthermore, Washington encouraged the United States not to meddle in European affairs. Many historians believe that Hamilton actually wrote many of the key passages of the speech, even though its tone is distinctly Washington's. Washington retired from public life in 1796, and Vice-President John Adams was elected President, much to Hamilton's dismay.
The French government responded violently to Jay's Treaty, which they saw as an Anglo-American alliance against France. Between the years 1796 and 1800, the French Navy seized or destroyed hundreds of American ships and cut off all formal diplomatic relations with the United States. Hamilton petitioned President Adams to send John Jay to Paris to negotiate another treaty with France. Adams agreed, but when the ambassadors arrived in France, the French government demanded a bribe of a quarter of a million dollars before it would even talk with the Americans. The demand for the bribe became known as the XYZ Affair, named after the three unnamed French diplomats who had demanded payment. Americans were shocked and many demanded war. Hamilton did not want war at this time, but agreed that the U.S. should begin preparing its military.