Spain sued for peace; Prussia withdrew her armies from the Rhine; the Sardinians were driven back from the Maritime Alps; the Rhine provinces were wrested from the Austrians; and before the year ended Holland was lost. Pichegru crossed the Waal in mid-winter with an overwhelming force, and the wretched remnant of ten thousand men who had followed the Duke of York to the Netherlands, thinned by disease and by the hardships of retreat, re-embarked for England.

The victories of France broke up the confederacy which had threatened it with destruction. The Batavian republic which Pichegru had set up after his conquest of Holland was now an ally of France. Prussia bought peace by the cession of her possessions west of the Rhine. Peace with Spain followed in the summer, while Sweden and the Protestant cantons of Switzerland recognized the Republic. In France itself discord came well-nigh to an end. The fresh severities against the ultra-republicans which followed on the establishment of a Directory indicated the moderate character of the new government, and Pitt seized on this change in the temper of the French government as giving an opening for peace. Pitt himself was sick of the strife. England had maintained indeed her naval supremacy. The triumphs of her seamen were in strange contrast with her weakness on land; and at the outset of the contest, in 1794, the French fleet was defeated off Brest by Lord Howe in a victory which bore the name of the day on which it was won, the First of June. Her colonial gains too had been considerable.

Most of the West Indian islands which had been held by France, and the far more valuable settlements of the Dutch, the Cape of Good Hope, Ceylon, and the famous Spice Islands of the Malaccas and Java had been transferred to the British Crown. But Pitt was without means of efficiently carrying on the war. The army was small and without military experience, while its leaders were utterly incapable. "We have no General," wrote Lord Grenville, "but some old woman in a red riband." Wretched too as had been the conduct of the war, its cost was already terrible. If England was without soldiers, she had wealth, and Pitt had been forced to turn her wealth into an engine of war. He became the paymaster of the coalition, and his subsidies kept the allied armies in the field. But the immense loans which these called for, and the quick growth of expenditure, undid all his financial reforms. Taxation, which had reached its lowest point under Pitt's peace administration, mounted to a height undreamt of before. The public debt rose by leaps and bounds.

In three years nearly eighty millions had been added to it.

But though the ruin of his financial hopes, and his keen sense of the European dangers which the contest involved, made Pitt earnest to close the struggle with the Revolution, he stood almost alone in his longings for peace. The nation at large was still ardent for war, and its ardour was fired by Burke in his "Letters on a Regicide Peace," the last outcry of that fanaticism which had done so much to plunge the world in blood. Nor was France less ardent for war than England. At the moment when Pitt sought to open negotiations, her victories had roused hopes of wider conquests, and though General Moreau was foiled in a march on Vienna, the wonderful successes of Napoleon Buonaparte, who now took the command of the army of the Alps, laid Piedmont at her feet. Lombardy was soon in the hands of the French, the Duchies south of the Po pillaged, and the Pope driven to purchase an armistice. Fresh victories enabled Buonaparte to wring a peace from Austria in the treaty of Campo Formio, which not only gave France the Ionian Islands, a part of the old territory of Venice, as well as the Netherlands and the whole left bank of the Rhine, but united Lombardy with the Duchies south of the Po, and the Papal States as far as the Rubicon, into a "Cisalpine Republic," which was absolutely beneath her control.

The withdrawal of Austria left France without an enemy on the Continent, and England without an ally. The stress of the war was pressing more heavily on her every day. The alarm of a French invasion of Ireland brought about a suspension of specie payments on the part of the Bank. A mutiny in the fleet was suppressed with difficulty. It was in this darkest hour of the struggle that Burke passed away, protesting to the last against the peace which, in spite of his previous failure, Pitt tried in 1797 to negotiate at Lille. Peace seemed more needful to him than ever; for the naval supremacy of Britain was threatened by a coalition such as had all but crushed her in the American War. Again the Dutch and Spanish fleets were allied with the fleets of France, and if they gained command of the Channel, it would enable France to send overwhelming forces in aid of the rising which was planned in Ireland. But the danger had hardly threatened when it was dispelled by two great victories. When in 1797 the Spanish fleet put out to sea, it was attacked by Admiral Jervis off Cape St. Vincent and driven back to Cadiz with the loss of four of its finest vessels; while the Dutch fleet from the Texel, which was to protect a French force in its descent upon Ireland, was met by a far larger fleet under Admiral Duncan, and almost annihilated in a battle off Camperdown, after an obstinate struggle which showed the Hollanders still worthy of their old renown.

The ruin of its hopes in the battle of Camperdown drove Ireland to a rising of despair; but the revolt was crushed by the defeat of the insurgents at Vinegar Hill in May, 1798, and the surrender of General Humbert, who landed in August with a French force. Of the threefold attack on which the Directory relied, two parts had now broken down. England still held the seas, and the insurrection in Ireland had failed. The next year saw the crowning victory of the Nile. The genius of Buonaparte had seized on the schemes for a rising in India, where Tippoo Sahib, the successor of Hyder Ali in Mysore, had vowed to drive the English from the south; and he laid before the Directory a plan for the conquest of Egypt as a preliminary to a campaign in Southern India. In 1798 he landed in Egypt; and its conquest was rapid and complete. But the thirteen men-of-war which had escorted his expedition were found by Admiral Nelson in Aboukir Bay, moored close to the coast in a line guarded at either end by gun-boats and batteries. Nelson resolved to thrust his own ships between the French and the shore; his flagship led the way; and after a terrible fight of twelve hours, nine of the French vessels were captured and destroyed, two were burnt, and five thousand French seamen were killed or made prisoners.