Ratifications were exchanged in Budapest on December 17, 1921, and the treaty became effective on the same day.

[2] During the First World War, Hungary—which formed part of the nucleus of the Austro-Hungarian Empire—was defeated by the Allied Powers, one of which was the United States of America.

At the end of the war in 1918, Austria-Hungary disintegrated and Hungary was established as a democratic republic, to be replaced by a regency in search of a king in early 1920.

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

The treaty laid the foundations for a U.S.–Hungarian cooperation not under the strict supervision of the League of Nations.