The Treaty of Versailles has been given this name because it was the outcome of negotiations at the end of World War I, which were signed in the Palace of Versailles in France on 28th of June, 1919. Whilst it was hailed across the world as an amazing feat of negotiation, bringing peace to the world by putting an official end to the horrors of World War I, the reaction in Germany to what they call the “Versailler Vertrag” couldn’t have been more different. Yes, of course many people in Germany were also grateful and relieved that the war was finally over. However, soon the realization settled in that the Treaty of Versailles was anything but a fair settlement for all parties involved.

The main questionable part of the Treaty of Versailles was the fact that it forced Germany to accept full responsibility for World War I. This obviously did not sit well with the Germans, who very much felt that it had not just been solely their fault at all. You can see how much the Germans were upset by this, when you consider the fact that this clause, Article 231, was often referred to as Schandklausel in German, meaning the “clause of shame.” In fact, the Treaty of Versailles itself was often referred to as the Schandvertrag, the “treaty of shame,” by Germans, who felt treated very unfairly and victimized as a result of this.

Whilst Article 231 formed more of a psychological punishment of Germany, through public humiliation and shaming, there were also some other aspects of the Treaty of Versailles, which were more of physical nature. For example, the Treaty of Versailles meant loss of considerable amounts of money for Germany, given that it required Germany to pay reparations to the Allied Powers.

Furthermore, Germany also lost a lot of its territory: in total, Germany lost 25,000 square miles of its original territory. This was not only a punishment for the German government, but for the German people themselves, given that many of them lost their homes as a result of these measures.

The presence of the desire to punish Germany was evident from the start of the process in drafting the Treaty of Versailles.  On one hand, President Wilson actually sought to create a set of terms which was more benevolent to Germany.  Yet, in order to secure the support of Britain and France, there had to be more of a punitive tone in the terms of the treaty.  Since Wilson needed their support, and this was their price, he ended up acquiescing.  The terms of demanding war reparations from Germany, preventing future rearmament, and ensuring that there was a significant land loss as a result helped to punish Germany, as it was seen as a step to prevent Germany from exercising such aggression in the future.  In reality, what ended up transpiring was that the Treaty helped to solidify and consolidate German resentment to the point where the Treaty became a symbol of all who stood against Germany, and, in the process, starting the Second World War.

The Versailles Peace Conference was dominated by President Wilson, George Clemenceau of France, and Vittorio Orlando of Italy. While the conference held discussions on the creation of a League of Nations and the principle of self determination for individual nations it was clear that many European nations wanted the aggressor Germany punished. During the conference President Wilson found out that there were secret treaties made between several European nations at the start of the war indicating that the European powers upon their victory had already decided upon Germany's fate. The European powers demanded reparations, land, and total disarmament. The mindset was to not only to have Germany declare its defeat, it was to place Germany naked upon the hill for all the world to stare and point their fingers.

The Treaty of Versailles was designed mostly to punish Germany, reflecting the bitter and vengeful feelings that Britain and France felt towards their World War I enemy.  It took away the German empire by seizing its colonies, and it limited the German Army to a 100,000 man security force.  There would be no German navy or air force.  The Rhineland had to be demilitarized, and worst of all, Germany was required to pay a $40 billion reparations bill to the Allies for starting the war.

This bill wrecked the German economy in the 1920s and led to the economic and political conditions that created Adolf Hitler.

It did this in a lot of ways.  Generally speaking, it took away territory and goods from Germany and it made them pay what were called reparations for the war.  It reduced the size of their military,  Finally, it made them admit that the war was all their fault, even though you could really argue that it was not.

The Treaty took a lot of land away from Germany.  This included land in Europe as well as colonies (including the tiny island in Micronesia where I grew up).

It also reduced the size of their armed forces and told them they were only supposed to be defensive.

It made Germany pay huge sums of money to the other countries to make up for allegedly causing the war.

How did the Treaty of Versailles punish Germany after World War I?

The Treaty of Versailles stripped Germany of a considerable amount of territory, slashed the size of the German armed forces, and imposed massive reparations payments on the postwar German government. All of this was based on a so-called "war guilt" clause in the Treaty in which the Germans accepted full responsibility for starting the war. The terms, which were imposed upon the new Weimar Republic that governed Germany after the war, were humiliating for the Germans, and contributed to a toxic political atmosphere in postwar Germany that facilitated the rise of political extremists like the Nazis. Moreover, the reparations payments were ruinous to the German economy in the short term. The German government struggled to make the payments, and France actually occupied the Saar Valley in order to enforce them. Runaway inflation set in that brought the economy and the Weimar government to the brink of collapse in the mid-1920s. Above all, the fact that the Treaty was signed by the Weimar government (the Kaiser having abdicated at the end of the war) made it very unpopular across the political spectrum. 

How did the Treaty of Versailles punish Germany?

The Germans were forced to accept guilt for starting the war. This was highly debatable in light of events in the summer of 1914, but it served as justification for the harsh punishments assessed in the rest of the Treaty of Versailles. These included:

• Germany was stripped of territories, including Alsace-Lorraine, which the Germans had conquered from France during the Franco-Prussian War, their moment of national unification in the 1870s. This was deeply insulting, as the region contained a significant number of German people. 
• British and French "administration" of the coal-rich Saar Valley for fifteen years. 
• The size of the German military, long a source of German national honor, was limited to 200,000. This was a small fraction of its wartime force and much smaller than that of its neighbor and enemy France.
• Germany was forced to renounce all "rights, titles, and privileges" in its former colonies, mostly in Africa. 
• Germany was forced to pay massive reparations to France and Great Britain. These totaled tens of billions of dollars, and, while they were eventually renegotiated, were ruinous to the German postwar economy.

All of these measures created an especially toxic political atmosphere in postwar Germany, one which contributed to the rise of radical political movements, including the National Socialist Party led by Adolf Hitler.