Adams at once summoned Congress and addressed the members in stirring words. He denied that the Americans were a "degraded people, humiliated under a colonial sense of fear … and regardless of national honor, character, and interest." It seemed best, however, to make one more effort to avoid war. Adams therefore sent John Marshall, a Virginia Federalist, and Elbridge Gerry, a Massachusetts Republican, to France. They were to join Pinckney and together were to negotiate with the French Directory. When they reached Paris three men came to see them. These men said that America (1) must apologize for the President's vigorous words, (2) must lend money to France, and (3) must bribe the Directory and the Minister of Foreign Affairs. These outrageous suggestions were emphatically put aside. In sending the papers to Congress, the three men were called Mr. X., Mr. Y., and Mr. Z., so the incident is always known as the "X.Y.Z. Affair."

Federalists and Republicans joined in indignation. "Millions for defense, not one cent for tribute," was the cry of the day. French flags were everywhere torn down. "Hail Columbia" was everywhere sung. Adams declared that he would not send another minister to France until he was assured that the representative of the United States would be received as "the representative of a great, free, powerful, and independent state."