The downfall of the Federalist Party began with the election of John Adams in 1796. The result of the election was predictable: Adams took New England and Thomas Jefferson took the South. The middle states voted for Adams, who won the election by a small margin. Thomas Jefferson would become vice-president.
Adams quickly alienated members of the Federalist Party by failing to consult with them before making decisions. Unlike George Washington, Adams had no intention of including Alexander Hamilton in political affairs. Because many of Adams’ cabinet members were closely allied with Hamilton, there was a general perception that Hamilton was in control.
Relations between the United States and France took a turn for the worse after the passage of the pro-British Jay Treaty in 1796, which eventually resulted in strained relations between the two nations and the threat of war. Jeffersonian Republicans, convinced that Adams was withholding the truth regarding the French peace proposals in preventing the war, demanded he come clean. Adams subsequently released news of the XYZ Affair, an episode in which three French agents demanded bribes, concessions, and loans from the American Government in exchange for peace discussions. The rejection of French demands led to the Quasi-War in 1798, an undeclared naval war between France and the United States, in which each country seized naval vessels belonging to the other. Anti-French sentiment swept the new nation, severely damaging the standing of Jefferson and the pro-French Republicans. John Adams subsequently stunned his party by re-opening peace negotiations with France in 1799. Adams’ efforts proved successful and his diplomatic handling of the situation likely prevented the escalation of the war. Relations between Hamilton and Adams, however, continued to decline as Adams fired Hamilton supporters from his cabinet, causing the party to split into a faction that supported Adams and a faction that supported Hamilton. The split in the Federalist Party helped Thomas Jefferson win the Presidential Election of 1800.