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Once the French Revolution began and war broke out between Britain and France, the United States was caught between the two sides. Ever since the American Revolution, the United States and Britain remained in conflict. In fact, Britain refused to leave many of the Northwest American forts after they signed the Treaty of Paris. While British goods were still sold in American markets, the British blocked American exports with trade bans and tariffs. Once war with France broke out, the British seized neutral American ships headed to France and impressed sailors into their navy. In order to avoid conflict with Britain, Washington sent John Jay to organize a treaty with Britain.

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"There shall be a firm inviolable and universal Peace, and a true and sincere Friendship between His Britannick Majesty, His Heirs and Successors, and the United States of America; and between their respective Countries, Territories, Cities, Towns and People of every Degree, without Exception of Persons or Places."

"His Majesty will withdraw all His Troops and Garrisons from all Posts and Places within the Boundary Lines assigned by the Treaty of Peace to the United States. "

"His Majesty consents that the Vessels belonging to the Citizens of the United States of America, shall be admitted and Hospitably received in all the Sea Ports and Harbours of the British Territories in the East Indies: and that the Citizens of the said United States, may freely carry on a Trade between the said Territories and the said United States."

http://avalon.law.yale.edu/18th_century/jay.asp

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Jay's Treaty was very unpopular among the population and senate approved it in a twenty to ten vote in favor. Washington approved the treaty as he knew America could not risk military conflict because the United States was still a young and weak nation. In addition, the United States lacked the economic resources to engaged in another war. Thus, Washington accepted the terms of the treaty as this was the only way peace with Britain could be achieved.

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John Jay sought to establish a treaty which would create stable relations with Britain. Jay did not have much to negotiate with, however he did threaten American support of the Danish and Swedish who were defending themselves from British seizure. The final treaty, signed in 1794, did not resolve most American issues with Britain, however, Britain did agree to leave their northwestern forts in the United States.

John Jay (seen below)