As a result, the two governments started negotiations for a bilateral peace treaty not connected to the League of Nations.

On July 2, 1921, U.S. President Warren G. Harding signed the Knox–Porter Resolution, which had been passed by the U.S. Congress and ended the state of war between the U.S. and Germany, Austria and Hungary, further setting the stage for bilateral peace treaties.

The treaty laid the foundations for an American-German co-operation that was not under the strict supervision of the League of Nations.

Following the conclusion of the peace treaty, diplomatic relations between the two governments were reestablished, and on December 10, 1921, the new U.S. chargé d'affaires, Ellis Loring Dresel, presented his credentials in Berlin.

[3] The treaty was supplemented by a treaty signed in Berlin on August 10, 1922 that provided for the establishment of an American-German commission to decide the amount of reparations to be paid by the German government to the U.S.[4] To commemorate the signing of both this treaty and the U.S.—Austrian Peace Treaty, the Morgan silver dollar (whose mintage had resumed earlier in the year following a 17-year absence due to a silver bullion shortage) was retired in favor of the new Peace dollar design (just over one million Peace dollars were minted in December 1921, compared with more than 86 million Morgan dollars earlier in that same year), which continued to be minted through 1928, with a resumption in 1934 and 1935.