loans incurred during the Revolutionary War, arguing the execution of Louis XVI and establishment of the French First Republic rendered existing agreements void. They further argued American military obligations under the Treaty of Alliance applied only to a "defensive conflict" and thus did not apply, since France had declared war on Britain and the Dutch Republic. To ensure the US did not become involved, Congress passed the Neutrality Act of 1794, while President George Washington issued an Executive Order forbidding American merchant ships from arming themselves. France accepted these acts, but on the basis of 'benevolent neutrality', which they interpreted as allowing French privateers access to US ports, and the right to sell captured British ships in American prize courts, but not vice versa. However, the US viewed 'neutrality' as the right to provide the same privileges to both. These differences were further exacerbated in November 1794 when the US and Britain signed a new trade agreement, which contradicted the 1778 Commercial Treaty granting France "most favoured nation" status. The Jay Treaty resolved outstanding issues from the American Revolution, and expanded trade between the two countries; between 1794 and 1801, American exports to Britain nearly tripled in value, from US$33 million to $94 million. As a result, in late 1796 French privateers began seizing American ships trading with the British. An effective response was hampered by the almost complete lack of a United States Navy, whose last warship had been sold in 1785, leaving only a small flotilla belonging to the United States Revenue Cutter Service and a few neglected coastal forts. This allowed French privateers to roam virtually unchecked; from October 1796 to June 1797, they captured 316 ships, 6% of the entire American merchant fleet, causing losses of $12 to $15 million. On March 2, 1797, the Directory issued a decree permitting the seizure of any neutral shipping without a role d'equipage, a crew manifest which listed the nationalities of each crewmen. Since virtually no American merchantman carried such a document, this effectively initiated a French commerce war on American shipping. Efforts to resolve the conflict through diplomacy ended in the 1797 dispute known as the XYZ Affair. However, the hostilities created support for establishing a limited naval force, and on June 18, President John Adams appointed Benjamin Stoddert the first Secretary of the Navy. On July 7, 1798, Congress approved the use of force against French warships