What's the xyz affair

XYZ affair was a political affair in 1797 and 1798 involving United States and France.

It was a situation in which war could have been declared. It started with financial problems of the French government and their decision to seize American merchant ships. A diplomatic mission was working towards a de-escalation of the conflict, but the French side demanded bribes, which the US didn't want to grant.

The conflict finally was settled in a diplomatic way and a war was avoided.