What is the "punishment clause" in the Treaty of Versailles?    

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Actually, Article 231 of the Treaty of Versailles read:

The Allied and Associated Governments affirm, and Germany accepts, the responsibility of Germany and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected as a consequence of the war imposed upon them by the aggression of Germany and her allies.'

This was not completely true, of course, as there was plenty of guilt to share on both sides. The Allies relied on this clause to impose harsh reparation demands on Germany, so high that the entire amount was seven times the entire net worth of Germany. The French even calculated the possible pension of the youngest soldier who fought in the war and added that to the tab. It was this clause, and the reparations which followed, which gave Hitler a platform to attack the Treaty as unfair to Germany--which it was, in reality.



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The term "punishment clause" is most often used to refer to the clause in the Treaty of Versailles that forced Germany to pay reparations for having (supposedly) been the sole cause of the war.

Because the Allies blamed Germany for starting the war (and because they held the power and could force Germany to do more or less anything they wanted) they said that Germany had to pay for all the damages that had been done by the war.  The reparations were both monetary and "in kind."  The in kind reparations included things like shipments of coal, steel, and agricultural products.  Their total value came out to about $785 billion in today's money.

The reparations that were imposed on Germany helped to weaken their economy and also helped to make them angrier about the Treaty and more willing to go along with Hitler's ideas when he came to power.

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