The Thirteen Colonies' rebellion is entering its third year by 1778.

John Burgoyne's surrender at the Battle of Saratoga had signaled that the struggle against the American colonies is likely to prove longer and more costly than expected.

British defeat has raised the prospect of French intervention and of a European war.

North's government, fearful of war with France, seeks reconciliation with the American colonies and is willing to grant a fair measure of autonomy to this end, but what would have been enough in 1775 no longer suffices by 1778.

North has no intention of offering independence, but in the wake of Saratoga and with the prospect of a French alliance, the Americans are unlikely to agree with lesser terms.