Which provision of the Treaty of Versailles had the greatest economic impact on Germany

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Treaty of Versailles, peace document signed at the end of World War I by the Allied and associated powers and by Germany in the Hall of Mirrors in the Palace of Versailles, France, on June 28, 1919; it took force on January 10, 1920.

A brief treatment of the Treaty of Versailles follows. For full treatment, see international relations: Peacemaking, 1919–22.

The Paris Peace Conference

When the German government asked U.S. Pres. Woodrow Wilson to arrange a general armistice in October 1918, it declared that it accepted the Fourteen Points that he had formulated and presented to the U.S. Congress in January 1918 as the basis for a just peace. However, the Allies demanded “compensation by Germany for all damage done to the civilian population of the Allies and their property by the aggression of Germany by land, by sea and from the air.” Further, the nine points covering new territorial consignments were complicated by the secret treaties that England, France, and Italy had made with Greece, Romania, and each other during the last years of the war.

The treaty was drafted in the spring of 1919 during the Paris Peace Conference, which was conducted even as the world was in the grip of the influenza pandemic of 1918–19. The conference was dominated by the national leaders known as the “Big Four”—David Lloyd George, the prime minister of the United Kingdom; Georges Clemenceau, the prime minister of France; Woodrow Wilson, the president of the United States; and Vittorio Orlando, the prime minister of Italy. The first three in particular made the important decisions. None of the defeated nations had any say in shaping the treaty, and even the associated Allied powers played only a minor role. The German delegates were presented with a fait accompli. They were shocked at the severity of the terms and protested the contradictions between the assurances made when the armistice was negotiated and the actual treaty. Accepting the “war guilt” clause and the reparation terms was especially odious to them.

Which provision of the Treaty of Versailles had the greatest economic impact on Germany

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The population and territory of Germany was reduced by about 10 percent by the treaty. In the west, Alsace and Lorraine were returned to France, and the Saarland was placed under the supervision of the League of Nations until 1935. In the north, three small areas were given to Belgium, and, after a plebiscite in Schleswig, northern Schleswig was returned to Denmark. In the east, Poland was resurrected, given most of formerly German West Prussia and Poznań (Posen), given a “corridor” to the Baltic Sea (which separated East Prussia from the rest of Germany), and given part of Upper Silesia after a plebiscite. Gdańsk (Danzig) was declared a free city. All Germany’s overseas colonies in China, in the Pacific, and in Africa were taken over by Britain, France, Japan, and other Allied nations (see mandate).

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The Treaty of Versailles, signed in 1919 at the Palace of Versailles in Paris at the end of World War I, codified peace terms between Germany and the victorious Allies. The Treaty of Versailles held Germany responsible for starting the war and imposed harsh penalties on the Germans, including loss of territory, massive reparations payments and demilitarization. Far from the “peace without victory” that U.S. President Woodrow Wilson had outlined in his famous Fourteen Points in early 1918, the Treaty of Versailles humiliated Germany while failing to resolve the underlying issues that had led to war in the first place. Economic distress and seething resentment of the treaty within Germany helped fuel the rise of Adolf Hitler and his Nazi Party, as well as World War II.

WATCH: The Last Day Of World War I on HISTORY Vault 

The Fourteen Points  

In a speech to Congress in January 1918, Wilson laid out his idealistic vision for the world after World War I, which was at the time sometimes referred to as “the war to end all wars.”

In addition to specific territorial settlements based on an Allied victory, Wilson’s so-called Fourteen Points emphasized the need for national self-determination for Europe’s different ethnic populations.

Wilson also proposed the founding of a “general association of nations” that would mediate international disputes and foster cooperation between different nations in the hopes of preventing war on such a large scale in the future. This organization eventually became known as the League of Nations.

When German leaders signed the armistice ending hostilities in World War I on November 11, 1918, they believed Wilson’s vision would form the basis for any future peace treaty. This would not prove to be the case.

Paris Peace Conference 

The Paris Peace Conference opened on January 18, 1919, a date that was significant in that it marked the anniversary of the coronation of German Emperor Wilhelm I, which took place in the Palace of Versailles at the end of the Franco-Prussian War in 1871.

Prussian victory in that conflict had resulted in Germany’s unification and its seizure of Alsace and Lorraine provinces from France. In 1919, France and its prime minister, Georges Clemenceau, had not forgotten the humiliating loss, and intended to avenge it in the new peace agreement. 

The “Big Four” leaders of the victorious Western nations—Wilson of the United States, David Lloyd George of Great Britain, Georges Clemenceau of France and, to a lesser extent, Vittorio Orlando of Italy—dominated the peace negotiations in Paris. Germany and the other defeated powers — Austria-Hungary, Bulgaria and Turkey — were not represented at the Paris Peace Conference. Also absent was Russia, which had fought as one of the Allied powers until 1917, when, following the Russian Revolution, the country’s new Bolshevik government concluded a separate peace with Germany and withdrew from the conflict.

The Big Four themselves had competing objectives in Paris: Clemenceau’s main goal was to protect France from yet another attack by Germany. He sought heavy reparations from Germany as a way of limiting German economic recovery after the war and minimizing this possibility.

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Lloyd George, on the other hand, saw the rebuilding of Germany as a priority in order to reestablish the nation as a strong trading partner for Great Britain. For his part, Orlando wanted to expand Italy’s influence and shape it into a major power that could hold its own alongside the other great nations.

Wilson opposed Italian territorial demands, as well as previously existing arrangements regarding territory between the other Allies; instead, he wanted to create a new world order along the lines of his Fourteen Points. The other leaders saw Wilson as too naive and idealistic, and his principles were difficult to translate into policy.

In the end, the European Allies imposed harsh peace terms on Germany, forcing the nation to surrender around 10 percent of its territory and all of its overseas possessions. Other key provisions of the Treaty of Versailles called for the demilitarization and occupation of the Rhineland, limited Germany’s army and navy, forbade it to maintain an air force, and required it to conduct war crimes trials against Kaiser Wilhelm II and other leaders for their aggression.

Most importantly, Article 231 of the treaty, better known as the “war guilt clause,” forced Germany to accept full responsibility for starting World War I and pay enormous reparations for Allied war losses.

How Did the Treaty of Versailles Lead to World War II?

The Treaty of Versailles was signed on June 28, 1919, exactly five years after the Serbian nationalist Gavrilo Princip assassinated Archduke Franz Ferdinand and his wife in Sarajevo, sparking the outbreak of the war. Though the treaty included a covenant creating the League of Nations, an international organization aimed at preserving peace, the harsh terms imposed on Germany helped ensure that peace would not last for long.

Germans were furious about the treaty, seeing it as a diktat, or dictated peace; they bitterly resented the sole blame of war being placed at their feet. The nation’s burden of reparations eventually topped 132 billion gold Reichsmarks, the equivalent of some $33 billion, a sum so great that no one expected Germany to be able to pay in full; in fact, economists like John Maynard Keynes predicted the European economy would collapse if it did.

Keynes was not the only prominent critic of the Treaty of Versailles: The French military leader Ferdinand Foch refused to attend the signing ceremony, as he thought the treaty didn’t do enough to secure against a future German threat, while the U.S. Congress failed to ratify the Treaty of Versailles, and later concluded a separate peace with Germany. The United States would never join the short-lived League of Nations.

READ MORE: Germany's World War I Debt Was So Crushing It Took 92 Years to Pay Off

November Criminals

In the years following the Treaty of Versailles, many ordinary Germans believed they had been betrayed by the “November Criminals,” those leaders who signed the treaty and formed the post-war government.

Radical right-wing political forces—especially the National Socialist Workers’ Party, or the Nazis—would gain support in the 1920s and ‘30s by promising to reverse the humiliation of the Versailles Treaty.

With the onset of the Great Depression after 1929, economic unrest destabilized the already vulnerable Weimar Republic government in Germany, setting the stage for Nazi leader Adolf Hitler’s fateful rise to power in 1933.

Sources

The Paris Peace Conference and the Treaty of Versailles. U.S. Department of State: Office of the Historian.
“The Treaty of Versailles: An Uneasy Peace,” WBUR.org (excerpt from Michael Neiberg, The Treaty of Versailles: A Concise History), August 13, 2017.
Treaty of Versailles. United States Holocaust Memorial Museum.
The Treaty of Versailles, 1919. Chateau de Versailles.

What was the economic impact of the Treaty of Versailles on Germany?

Due to the Versailles treaty, Germany was forced to pay incredibly sizeable reparations to France and Great Britain. In addition, the Versailles treaty, which many agreed was far too harsh, forced Germany to give up thirteen percent of its land. At first Germany tried to recover from the war by way of social spending.

What part of the Treaty of Versailles was most damaging to the German economy after World War I?

Perhaps the most humiliating portion of the treaty for defeated Germany was Article 231, commonly known as the "War Guilt Clause." This clause forced the German nation to accept complete responsibility for starting World War I. As such, Germany was to be held liable for all material damages.

What was the most important provision of the Treaty of Versailles?

Most importantly, Article 231 of the treaty, better known as the “war guilt clause,” forced Germany to accept full responsibility for starting World War I and pay enormous reparations for Allied war losses.

What was the most damaging part of the Treaty of Versailles for Germany?

Most importantly, Article 231 of the treaty placed all blame for inciting the war squarely on Germany, and forced it to pay several billion in reparations to the Allied nations.