Leo XIII was an outstanding Pope and Benedict XVI was right to commemorate his birth last weekend. But, there was a blemish on his record and it directly involved the Church in the United States. In early 1899, Leo dispatched an apostolic letter to Cardinal Gibbons entitled "Testem benevolentiae" in which he condemned the heresy of "Americanism."
America was not the first country to be singled out for papal condemnation, although as far as I can tell, we were the first to have a heresy named for us. Gallicanism had long haunted the Vatican's efforts to influence the Church in France, but it was never condemned as a heresy.
The condemnation of Americanism was the result of a great deal of papal court intrigue, combined with pressure from conservative French churchmen. A French translation of a biography of Paulist Founder Father Isaac Hecker was the proximate cause of the condemnation. Leo was at pains to indicate that he did not mean to indict the national character, but he was concerned that some wanted to turn the Church's willingness to accomodate itself with the country's democractic norms into an argument for greater democratization within the Church. This the aristocratic Leo, who for all his liberalizing tendencies nonetheless had an inflated, regal view of the papal office, would not abide.
Cardinal Gibbons had the letter translated into English and distributed himself. In a brilliant political move, Gibbons also released at the same time his reply to Leo in which he assured the pontiff that no one in America held the ideas condemned. This earned for Americanism the sobriquet "the phantom heresy." The controversy died out quickly, but the letter remains a stain on Leo's legacy. In his later years, conservative aides played on his fears and manipulated the elderly Pontiff, never completely winning him over, but in Testem Benevolentiae they scored a singular success and paved the way for the more disastrous theological approach of Leo's successor Pius X.