In 1917, the United States entered World War I after Germany expanded its submarine warfare to include the sinking of ships, including US passenger vessels. Even prior to the outbreak of war, President Woodrow Wilson had indicated to the American public his ultimate plans to secure world peace and to change the balance of world power. In January of 1918, Wilson presented his famous “Fourteen Points” speech to Congress, in which he outlined idealistic proposals for ending World War I and suggested principles for future implementation in the post-war world.
President Wilson’s recommendations included plans for settlement of territorial issues among the warring factions, covenants to maintain peace with respect to trade issues, arms reduction, free sea passage lanes, and rights of self-determination. His fourteenth point became the foundation of the League of Nations:
A general association of nations must be formed under specific covenants for the purpose of affording mutual guarantees of political independence and territorial integrity to great and small states alike.
In January 1919, the initial Paris Peace Conference was held at Versailles for the purpose of establishing the terms of a peaceful settlement to the war. Wilson’s Fourteen Points formed the basis of a League of Nations, which would include plans for an international security agreement to prevent future wars. Although Wilson was a strong supporter of the League, the concept was unpopular at home and faced fierce congressional opposition since it was widely believed that such an international security agreement would financially overburden the United States and weaken the nation’s ability to maintain its own defenses. Additionally, Congress feared future entanglements with European political affairs.
The Treaty of Versailles encapsulated the main ideas for establishing a just peace from Wilson’s Fourteen Points, but changed many of the territorial divisions Wilson had suggested. Acceptable territorial boundaries were complicated by secret treaties among and between allied nations for post-war divisions. In addition, the treaty focused mainly on punishing Germany for the war, while Wilson’s plan called for far more leniency toward Germany. Instead, the other allied nations insisted upon:
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.
Ultimately, Wilson’s insistence on an international security agreement resulted in the US rejection of the League of Nations. The US did not enter the League, which weakened it considerably. Furthermore, with the exception of the return of Alsace-Lorraine to France, the political territorial provisions proposed by Wilson in his Fourteen Points differed greatly from divisions adopted in the Treaty of Versailles. Finally, Wilson’s idea of a just peace as articulated in his Fourteen Points conflicted with the harsh restrictions and reparations demanded by the allied nations in the Treaty of Versailles.
In very broad terms, one could say that Wilson's Fourteen Points were concerned with general principles whereas the Treaty of Versailles was more focused on specifics. This is not surprising as Wilson announced his Fourteen Points while the First World War was still raging, and so he was limited as to how specific he could be.
To be sure, there were specific proposals in the Fourteen Points, most notably the ceding of Alsace-Lorraine to France. But the most important of Wilson's Fourteen Points was undoubtedly the principle of self-determination, whereby each European nation would get to choose who ruled it.
The Treaty of Versailles, on the other hand, was focused like a laser-beam on punishing Germany. Under the terms of the Treaty, sole responsibility for the First World War was laid at Germany's door, meaning that it would have to pay a very heavy price for its actions.
The Treaty set out in precise detail exactly what price Germany would be expected to pay. In monetary terms, the price was truly staggering. Germany would have to pay reparations to the Allies to the tune of almost $270 billion in today's money.
In terms of national prestige, the price was greater still. The German Army was reduced to just 100,000 men and six battleships. For good measure, all of Germany's overseas colonies were to be handed over to the control of the League of Nations, whose establishment was the fourteenth of Wilson's Fourteen Points.
Wilson's Fourteen Points were extremely idealistic, in that he felt Britain and France would embrace his plans to permanently do away with war by following his prescription for peace.
Ultimately, only four of the fourteen were adopted into the final Treaty of Versailles:
1) Freedom of the Seas
2) National Self-Determination (the idea that Poles should be able to live in Poland, not as part of a larger empire. Czechs in Czechoslovakia, etc.)
3) Open Covenants, openly arrived at (no secret treaties)
4) a League of Nations
While these were positive steps and good ideas to promote a more peaceful world and reduce the risk of future wars, they did little to stop the onset of World War II, and some historians argue, may have actually contributed to it.
In general, the big difference is that Wilson's 14 Points were all about being kind to other nations and things like that while the Treaty of Versailles was very anti-Germany.
In the 14 Points, Wilson laid out the idea of having nations not really try to take advantage of other nations -- it was very idealistic. But the Treaty of Versailles was really meant to punish Germany in a lot of ways. For example, it took a lot of land way from Germany even though the people living on those bits of land were German (this goes against the idea of ethnic groups ruling themselves).
So, the major difference is that the 14 Points were idealistic and conciliatory while the Treaty of Versailles tried to punish Germany harshly.
I guess one other thing to mention is that the Treaty of Versailles did not do away with colonies the way Wilson would have liked.