John Adams handled the conflict with France by sending diplomats to discuss neutral rights after French ships began seizing American vessels. The French agents demanded a bribe and loan before negotiating, known as the XYZ Affair. Adams told Congress but avoided war, instead strengthening the navy. The Federalist party split over whether to go to war with France, with Hamilton wanting war and Adams wanting to avoid it. The Alien and Sedition Acts raised states' rights issues by allowing deportation of aliens and criticism of government to be outlawed, which Jefferson and Republicans opposed by arguing states could nullify federal laws.