What exactly is the incident Washington is talking about?
I believe the treaty discussed is the Treaty of Paris, which "ended the Revolutionary War between Great Britain and the United States, recognized American independence and established borders for the new nation."
I'll get back to this after today's labors are finished. Sorry I couldn't do more at this time.
In 1783, the Treaty of Paris had been signed, and Sir Guy Carleton boarded his troops on ships from their New York garrison, and they all headed back to England. It was time for Americans to govern themselves according to the Articles of Confederation without a common enemy to unite them. It didn't work.
It was time for the troops to go home, and they hadn't been paid in hard money. (If you check an earlier Loud Mime thread, you'll see my explanation of America's early financial woes and Hamilton's solution to them.) They had been paid in Continental Dollars, a paper fiat currency backed with the promise to pay in Spanish Milled Dollars. Unfortunately, the federal government didn't have a pot to piss in and had little in the way of Spanish Milled Dollars -- or anything else. As a result, the Continental Dollar began to get discounted by creditors even though the words "legal tender" (forced tender) were printed on them. During the war patriots had been willing to accept this paper currency because there was a war on. (Loyalists preferred British gold and silver.) Once the war was over, that patriotic sentiment was set aside because there were debts to be paid to creditors, and the troops, who were mostly yoeman farmers, were holding paper money that was now becoming worthless. The Confederation Congress was not up to the job of fixing what was wrong because the Articles weren't up to the job.
Robert Morris, proprietor of the Bank of North America in Philadelphia, decided to act. With the assistance of Gouveneur Morris, not a relation, they approached Hamilton and asked him to approach Washington with a proposal. Washington was to take his army to Philadelphia, overthrow Congress and set himself up as King George I of America. The nation's finances would be placed on a firm footing, and America would be ruled by a wise monarch. Many of Washington's officers at the Newburgh encampment thought this was the way to go, and Washington found himself with a budding fascist movement on his hands.
In an acting tour de force, Washington borrowed from "Cato" by Addison, his favorite play, and read an address to his troops cautiously arguing against the plot without mentioning the plot or its ringleaders. He put on his glasses publicly for the first time and hinted that he had been losing his sight in the service of his country. When we was finished there wasn't a dry eye in the house, and the plot quickly fell apart.
In 1785, the Bank of North America collapsed, triggering the final collapse of the Continental Dollar. The Pennsylvania Militia revolted and took over Philadelphia, forcing the Confederation Congress to flee to Princeton. Hamilton fulminated that Washington return to the military and put down the rebellion in Philadelphia, but it all blew over. What didn't blow over was the collapse of the basic currency unit. (I'll leave Loud Mime to link to my earlier full explanation of how that collapse led to Shay's Rebellion and the Constitutional Convention.)
A final note. At Newburgh, Hamilton had warned the Morrises that Washington would never go for the coup d'etat proposal. When the Constitutional Convention opened in Philadelphia, Washington was having dinner in one of the better taverns in town with Hamilton and some other members of his old wartime staff. Robert Morris, now disgraced because of the loss of his bank, made himself scarce, but Gouveneur Morris happened to be having dinner there at the same time. Morris had asked Hamilton if he could approach His Excellency, and Hamilton, who knew damn well Washington's opinion of the man, smiled and suggested he try it. (Hamilton had a puckish sense of humor and was fond of practical jokes.) Morris clapped Waashington on the shoulder and gave him a loud welcome. Washington gave Morris a look that would have frozen brimstone, and Morris skedaddled out of the tavern with Hamilton laughing up his sleeve.