The highly profitable period of the colony had been from around 1750 to 1850 based on transit trade and the production of rum and sugar using African slaves as labor.

At the negotiations for the Treaty of Vienna after the defeat in the Second Schleswig War in 1864, Denmark had tried to use the islands as a trade-in for South Jutland, but the Prussian Government was not interested.

[2] At the eve of the American Civil War, the United States became interested in the islands as the possible location of a Caribbean naval base.

[3][4] However, the United States Senate did not ratify the treaty due to concerns over a number of natural disasters that had struck the islands and a political feud with and the possible impeachment of President Andrew Johnson.

In particular the conservative party Højre opposed it on the grounds that the treaty did not ensure the local population a vote on the matter, and that it did not grant them US citizenship or freedom from customs duty on the export of sugar to the United States.

[15] Those who opposed the sale now demanded that the treaty should be reviewed by a new parliament, with the intent to trigger a new election and hoping that the government would thereby lose its majority in the Folketing.

[16] The prospect of forming a broad-based government of national unity proved to be extremely difficult due to the poisoned atmosphere, and after Scavenius on 6 September had rejected an offer from Christian X of Denmark to form a new government, the parties found a compromise on 30 September: each of the three opposition parties would appoint one of their members to enter the cabinet as Ministers without Portfolio, a commission to document the negotiations on the sale would be established, and a referendum would be held.

[2] On 21 December the Danish parliament ratified the treaty, and on 9 March 1917 Christian X of Denmark officially said goodbye to the islands in an open letter.

[22] In an attempt to create national reconciliation, most of the 25 million dollars was spent in Southern Jutland after the Schleswig Plebiscites and the return of the region to Danish rule in 1920.