The treaty stipulated the legalization of the demarcation lines of 13 June 1919 as the new borders and guaranteed the end of the blockade and the restoration of free trade between the former Habsburg lands and the import of coal into Hungary.

The letter, signed by the President of the Paris Peace Conference, Alexander Millerand, dated 6 May 1920, stated that the Entente Powers and their allies determined new borders of Hungary without plebiscites due to their belief that "a popular consultation ... would not produce significantly different results".

Wilson emphasized that since his Fourteen Points on 8 January the situation has changed, that the USA has recognized the Czechoslovak National Council in Paris as a de facto government, and that the "oppressed nations of Austria-Hungary will themselves assess what will satisfy their aspirations and their rights"..[37] In his last political speech to the Hungarian parliament, Tisza bitterly complained about how the Entente powers "negotiated with the internal enemies of the state" which meant that now he was forced to enter talks with "the phantasmagoria of a Czechoslovak state".

On the 1st of November, the pacifist and pro-Entente Károlyi's new Hungarian government decided to recall all of the troops, who were conscripted from the territory of Kingdom of Hungary, which was a major blow for the Habsburg's armies.

Military and political events changed rapidly and drastically after the Hungarian unilateral disarmament: Károlyi appointed the liberal progressive and pacifist Oszkár Jászi to become Minister without portfolio for nationality questions.

In mid-November 1918, the Czechoslovak troops advanced into the northern parts of the collapsing kingdom (i.e. future Slovakia), but on 14 November Károlyi ordered the Hungarian forces to repulse the "Czech invasion" back.

On the same day the Slovak National Council dispatched Pavel Fábry to Budapest on an official mission to discuss public security and police order in their respective areas.

Fábry reported back that the Károlyi government considered the fight against Yugoslavs and Romanians to be lost, and instead aimed to send all of their military forces to the northern front, in order to at least retain "Upper Hungary".

"[73] On 24 December 1918, the French Minister of Foreign Affairs Stephen Pichon informed Budapest of a new demarcation line, and the Hungarian government agreed to extend the Czechoslovak zone of occupation to Pozsony (Bratislava), Komárom (Komárno), Kassa (Košice) and Ungvár (Užhhorod).

The Budapest approval for the Czechoslovak advancement was largely explained by the Hungarian desire to reopen trade with Czech lands and to obtain crucially needed coal amidst an energy crisis.

[76] During the rule of Károlyi's pacifist cabinet, Hungary rapidly lost control over approximately 75% of its former pre-WWI territories (325,411 km2 (125,642 sq mi)) without a fight and was subject to foreign occupation.

[citation needed] In June, the Hungarian Red Army invaded the eastern part of the so-called Upper Hungary, now claimed by the newly forming Czechoslovak state.

The concession eroded support of the communist government among professional military officers and nationalists in the Hungarian Red Army; even the chief of the general staff Aurél Stromfeld, resigned his post in protest.

Hungarian representatives also claimed credit for ending the war, when they laid down arms after Wilson promulgated his Fourteen Points, only to be rewarded with occupation and robbery of its territory by the Entente.

The alleged cultural inferiority of Romanians, Slovaks and Yugoslavs would not only lead to economic decline, but would also have a destructive effect on spiritual and moral life, on science, arts, literature, religion (especially European Catholicism), social development and political organization.

From the point of view of the great interests of humanity I think the fact of national hegemony falling into the hands of races who, while offering the best hopes for the future, are yet today on a low level of civilisation, can be looked upon neither with indifference nor with satisfaction."

[103] The Supreme Council rejected the maximum demands of the Czechoslovak side, nor did it apply a purely geographical or ethnic principle, but combined them with economical, historical, transportation, military strategical, and other geopolitical factors.

The Supreme Council accepted Czechoslovak arguments that showed that post-war Hungary was self-sufficient in coal, crude oil, grain, cattle and other areas of agriculture, railways and transport.

"The choice of Apponyi was very welcome to me", wrote Osuský back to Prague, "In the former Kingdom of Hungary, he embodied the spirit of disregard and oppression of the Slovaks, and as such I would grant to him that he should be the one to sign the sentence of condemnation not only of his life..."[107] The Czechoslovak, Romanian and Yugoslavian delegation decided on a joint approach when replying to the Hungarian memorandums.

Together with other international agreements signed at the Paris Peace Conference, such as the Saint-Germain Peace Treaty of 1919 and the Teschen Settlement of July 1920, it provided the legal framework for overcoming the economic chaos in Central Europe caused by the First World War and exacerbated by the disintegration of the Austro-Hungarian common market in late 1918.Breaking up a customs union: The case of the Austro-Hungarian Empire in 1919 The critical element of the economic paralysis in Hungary and other Danubian countries was the shortage of coal, which had been aggravating since 1914, but became critical in 1918-1920.

The great powers understood that Hungary's desperate need for coal and trade with neighbouring countries, particularly Czechoslovakia, would force Budapest to accept the heavy territorial losses in favour of Prague.

[124] During prior negotiations, the Hungarian party, along with the Austrian, advocated the American principle of self-determination: that the population of disputed territories should decide by free plebiscite to which country they wished to belong.

Beside exclusion of the previously mentioned territories, they did not include: By the Treaty of Trianon, the cities of Pécs, Mohács, Baja and Szigetvár, which were under Serb-Croat-Slovene administration after November 1918, were assigned to Hungary.

[citation needed] With regard to the ethnic issues, the Western powers were aware of the problem posed by the presence of so many Hungarians (and Germans) living outside the newly formed states of Hungary and Austria.

The Romanian delegation to Versailles feared in 1919 that the Allies were beginning to favour the partition of Transylvania along ethnic lines to reduce the potential exodus,[citation needed] and Prime Minister Ion I. C. Brătianu even summoned British-born Queen Marie to France to strengthen their case.

This poor great country, which saved both civilization and Christianity, has been treated with a bitterness which nothing can explain except the desire of greed of those surrounding her, and the fact that the weaker people, seeing the stronger overcome, wish and insist that she shall be reduced to impotence.

[181] For example, Hungary attracted international media attention in 1999 for passing the "status law" concerning estimated three-million ethnic Hungarian minorities in neighbouring Romania, Slovakia, Serbia and Montenegro, Croatia, Slovenia and Ukraine.

As a consequence of the treaty, all the competitive industries of the former empire were compelled to close doors, as great capacity was met by negligible demand owing to economic barriers presented in the form of the newly defined borders.

[213] The disintegration of the multinational state conversely impacted neighbouring countries, too: In Poland, Romania, Yugoslavia, and Bulgaria a fifth to a third of the rural population could find no work, and industry was in no position to absorb them.

[citation needed] In comparison, by 1921 the new Czechoslovak state reached 75% of its pre-war production owing to their favourable position among the victors and greater associated access to international rehabilitation resources.