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At the beginning of 1794, the landscape had changed somewhat in the administration. Jefferson had resigned at the end of the previous year, leaving Hamilton without opposition in the cabinet. (Former Attorney General Edmund Randolph, took Jefferson's post.) Washington was ensconced, albeit reluctantly, in his second term as President, after having been cajoled into running again by Hamilton and several others. Hamilton, equally disenchanted with his cabinet position, had planned to resign at the same time as Jefferson, however he decided to stay on another year to tie up some loose ends, and experience some relative administrative freedom out from under Jefferson's thumb. During this last year in Washington's cabinet, Hamilton reached the pinnacle of his power and influence, advising on and directing a wide range of foreign and domestic policy. However, Madison and the Republicans were as strong as ever in congress, and they were now challenging Hamilton's authority to deposit foreign loan funds in the Bank of the United States. While Hamilton was attempting to fight off the new charges of maladministration (of which he would eventually be completely exonerated by a select committee) he was at the same time concerning himself with the steadily declining state of affairs between the United States and Britain.
In March, the British passed an ordinance authorizing the capture of neutral ships trading with French territories, and began seizing American merchantmen. Congress pressed for anti-British commercial policies, and Washington responded by signing a thirty-day embargo on all foreign shipping. Hamilton supported the program, but went one step further, recommending national preparedness for war by building fortifications and warships, and enlarging the army. At the same time, however, he also recommended a special mission to Britain to work out differences and avoid what would undoubtedly be a disastrous war.
After refusing the appointment as special envoy himself--perhaps anticipating that a firestorm of opposition would ensue if he took the position--he recommended Chief Justice John Jay.
Jay's objectives were devised largely by Hamilton. He was to require of Britain compliance with the parts of the Treaty of Paris which were as yet unfulfilled, primarily the evacuation the Northwest posts, and remuneration of wartime damages. Jay was to ask for restitution for ships and cargoes seized under the recent British ordinance, and secure a commercial treaty which would neither interfere with American commerce with France, nor impede trade in the British West Indies. Hamilton hoped that the Jay mission would culminate in the alliance he considered so important for the future of the United States.
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