The Jay Treaty between the United States and Great Britain comes into force, facilitating ten years of peaceful trade between the two nations.
The Treaty of Amity, Commerce, and Navigation, Between His Britannic Majesty and the United States of America, commonly known as the Jay Treaty, and also as Jay's Treaty, was a 1794 treaty between the United States and Great Britain that averted war, resolved issues remaining since the Treaty of Paris of 1783 (which ended the American Revolutionary War), and facilitated ten years of peaceful trade between the United States and Britain in the midst of the French Revolutionary Wars, which began in 1792. The Treaty was designed by Alexander Hamilton and supported by President George Washington. It angered France and bitterly divided Americans. It inflamed the new growth of two opposing parties in every state, the pro-Treaty Federalists and the anti-Treaty Jeffersonian Republicans.
The Treaty was negotiated by John Jay and gained many of the primary American goals. This included the withdrawal of British Army units from forts in the Northwest Territory that it had refused to relinquish under the Paris Peace Treaty. The British were retaliating for the United States reneging on Articles 4 and 6 of the 1783 treaty; American state courts impeded the collection of debts owed British creditors and upheld the continued confiscation of Loyalist estates in spite of an explicit understanding that the prosecutions would be immediately discontinued. The parties agreed that disputes over wartime debts and the American–Canadian boundary were to be sent to arbitration—one of the first major uses of arbitration in modern diplomatic history. This set a precedent used by other nations. The Americans were granted limited rights to trade with British colonies in the Caribbean in exchange for some limits on the American export of cotton.
The Jay treaty was signed on November 19, 1794, and submitted to the United States Senate for its advice and consent the following June. It was ratified by the Senate on June 24, 1795, by a two-thirds majority vote of 20–10 (exactly the minimum number necessary for concurrence). It was also ratified by the British government, and took effect February 29, 1796, the day when ratifications were officially exchanged.
The treaty was hotly contested by Jeffersonians in each state. An effort was made to block it in the House, which ultimately failed. The Jeffersonians feared that closer economic or political ties with Great Britain would strengthen Hamilton's Federalist Party, promote aristocracy, and undercut republicanism. This debate crystallized the emerging partisan divisions and shaped the new "First Party System", with the Federalists favoring the British and the Jeffersonian republicans favoring France. The treaty was for ten years' duration. Efforts failed to agree on a replacement treaty in 1806 when Jefferson rejected the Monroe–Pinkney Treaty, as tensions escalated toward the War of 1812.