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

After the war ended, 24 October 1867, the Danish parliament, the Rigsdag, ratified a treaty on the sale of two of the islands — St. Thomas and St. John — for a sum of US$7,500,000.

[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 President Andrew Johnson that eventually led to his impeachment.

[8][9][10] 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.

[2][7] According to historian Povl Engelstoft, there is no doubt that Council President Johan Henrik Deuntzer was privately against the sale even though his party, the Venstre Reform Party, supported it, and when the Landsting failed to pass the proposal, he made a statement that neither did he see a reason for the cabinet to step down, nor would he dissolve the Landsting or assume responsibility for any further work related to the sale.

[12][15] Although rumors of the future sale did leak to the press, they were denied categorically by both Scavenius and Minister of Finance Edvard Brandes.

[12][18] Although it had a claim on northern Greenland based on explorations by Charles Francis Hall[19] and Robert Peary, the United States decided that the purchase was more important, especially because of the nearby Panama Canal.

[21] The treaty was signed on 4 August 1916, at the Biltmore Hotel in New York City by Danish Minister Constantin Brun and Secretary of State Robert Lansing.

On 31 March 1917, in Washington, D.C., a warrant for twenty five million dollars in gold was presented to Danish Minister Constatine Brun by Secretary of State Robert Lansing.