The hostilities between Germany and the Allied Powers during World War I officially ended with the signing of an armistice on November 18, 1918. Thereafter, the Treaty of Versailles, executed on June 28, 1919 at the Paris Peace Conference, was the first of several international treaties and agreements after World War I. However, the Treaty was regarded as excessively punitive by many Germans who felt they had been given a “stab in the back” by their leaders. (Lyons 2016, 34) Among the Treaty’s most important terms and conditions:
- France regained the territories of Alsace and Lorraine.
- The Rhineland territory was to be occupied by the Allies for 15 years, then demilitarized.
- Germany’s colonies in Asia and Africa were handed over to Britain, France, and Japan.
- Germany’s army could not exceed 100,000 soldiers
- No tanks or heavy artillery.
- German Navy could deploy only six warships and no submarines
- Germany could not deploy a military air force.
- Germany would pay $5 billion in cash immediately, $33 billion total (approximately $500 billion in 2017 USD).
- A “war guilt” clause (Article 231) implicitly blamed the Central Powers (especially Germany) for starting the war.
- Anschluss (unification of Germany and Austria) was forbidden.
In his book, The Economic Consequences of the Peace, John Maynard Keynes explicitly predicted World War II based on his observations of the short-sighted participants at the Paris Peace Conference. He lamented the myopia of French Prime Minister Clemenceau and was saddened by Clemenceau’s inability to acknowledge how the terrible economic burden they were placing on Germany would inevitably lead to a major conflict in the future.
One of the most onerous and controversial components of the Treaty was defined in Article 231, which compelled Germany to “accept the responsibility of Germany and her allies for causing all the loss and damage” during World War I. (Neiberg 2017) Colloquially called the “War Guilt Clause,” Article 231 did not merely represent a humiliating admission of guilt; it also forced Germany to make territorial concessions and pay astronomically high war reparations to the Allied Powers based on financial formulas that were highly subjective and objectionable to most Germans.
Despite the crushing burden of these provisions, French Marshal Ferdinand Foch regarded the Versailles Treaty as too lenient when he said, “this is not peace. It is an armistice for twenty years.” (Henig 2015) Foch’s prediction proved to be accurate, but ironically, he did not seem to acknowledge that France’s unrealistic economic demands were the principle cause of Germany’s post-WWI military build-up. In fact, no matter how many penalties France could have imposed, Germany would have still fallen short because France’s demands defied the laws of economics and physics. Thus, for many observers during and after the Paris Peace Conference, the vengeful approach taken by the French was the obvious cause of World War II 20 years later.
The bitter-sweet outcome of the Paris Peace Conference caused U.S. President Wilson’s advisor and friend, Edward Mandell House, to write in his diary on 29 June 1919:
I am leaving Paris, after eight fateful months, with conflicting emotions. Looking at the conference in retrospect, there is much to approve and yet much to regret. It is easy to say what should have been done, but more difficult to have found a way of doing it. To those who are saying that the treaty is bad and should never have been made and that it will involve Europe in infinite difficulties in its enforcement, I feel like admitting it. But I would also say in reply that empires cannot be shattered, and new states raised upon their ruins without disturbance. To create new boundaries is to create new troubles. . . . While I should have preferred a different peace, I doubt very much whether it could have been made, for the ingredients required for such a peace as I would have were lacking at Paris. (House Papers 1912-1924)
The Treaty of Versailles did not satisfy anybody and it caused virtually universal discontent among the peace conference participants. Predictably, hyper-inflation hit Germany in the 1920s. And by the time Hitler came to power in 1932, the worldwide Great Depression created severe deflation. These socioeconomic whiplashes destabilized the new German Weimar Republic, which was established largely to soften Germany’s militarism during WWI, but it had the perverse effect of radicalizing the German population and paving the way for Hitler to re-militarized Germany with Naziism and one of the largest military forces the world had ever seen.
Immediately after the Paris Peace Conference and throughout the interwar period, the terms of the Versailles Treaty became a major source of anger and political tension for German nationalists. This led to the rise of extreme right-wing parties, including the Nationalsozialistische Deutsche Arbeiterpartei (aka, the Nazi party). The deep discontent during the interwar period created political pressure for the peace conference participants to modify the original terms of the Treaty. This pressure resulted in a series of subsequent treaties and agreements, which were intended to reduce Germany’s burdens and achieve a more sustainable political atmosphere. A summary of these treaties and agreements follows:
- Treaty of Brest Litovsk (1918): Russia granted the Baltic states to Germany.
- Treaty of Saint-German-en-Laye (1919): Dissolved the country of Austria-Hungary.
- Treaty of Trianon (1920): Extracted Czechoslovakia, Yugoslavia, and Romania from Hungary.
- Treaty of Rapallo (1922): Germany and Soviet Union renounced territorial claims on each other.
- Pact of Locarno (1925): Permanently established Western European borders.
- Dawes Plan (1924): Called for the withdrawal of French and Belgian troops from the coal-rich, steel-producing Ruhr territory.
- Kellog-Briand Pact (1928): Renounced war as an instrument in border disputes.
- The Young Plan (1929): Reduced Germany’s overall financial reparations burden by approximately 20% and established the Bank for International Settlements as a trusted third party to manage Germany’s reparations payments.
Notwithstanding all these treaties and agreements, Hitler repeatedly violated them all by: implementing compulsory military conscription and rebuilding the German armed forces beyond the Treaty’s authorized levels (1935), reoccupying the Rhineland (1936), and annexing Austria (1938), among other violations.
Many U.S. and European politicians initially interpreted Hitler’s subversive actions as relatively benign because they assumed he would abide by the substantive terms of the Versailles Treaty and the subsequent treaties and agreements. Additionally, they yearned for peace after the devastation of WWI; colonial rivalries frequently led to competing interests; the American electorate was fiercely resistant to being entangled in another foreign war; and Belgium, Switzerland, the Netherlands and Luxembourg were all trying to remain neutral to avoid angering any nation. Under these conditions, it was virtually impossible for any strong, multinational coalition to form that might have resisted the German juggernaut earlier than 1939.
As a result of all these factors, the United States and European powers were essentially paralyzed during the interwar period, which allowed Hitler to consolidate power and build up the German military machine until 1939. By the time they finally realized that Hitler was intent on dominating all of Europe, it was too late to avoid WWII.
References:
Edward Mandell House Papers (MS 466) 1912-1924. Manuscripts and Archives, Yale University Library.
Henig, R. 2015. Versailles and after, 1919-1933. Routledge.
Keynes, J. M., & Keynes, J. M. 2004. The end of laissez faire: The economic consequences of the peace. Amherst, NY: Prometheus Books.
Lyons, M. J. 2016. World War II: A short history. London: Routledge.
Neiberg, M. S. 2017. The Treaty of Versailles: A concise history. Oxford University Press.
About Ferris Eanfar
Ferris Eanfar has over 20 years of experience in technical, financial, media, and government intelligence environments. He has written dozens of articles and several books in the fields of Economics, Crypto-Economics, and International Political Economy, including Broken Capitalism: This Is How We Fix It and GINI: Capitalism, Cryptocurrencies & the Battle for Human Rights and the Global Governance Scorecard. Ferris is a cofounder of the Gini Foundation, which builds unique cryptocurrency systems to protect human rights, among other benefits; and the CEO of the AngelPay Foundation, a nonprofit financial services company with a mission to “return wealth and power to the creators of value.” To learn more about Ferris, please visit the About Ferris page.Visit Ferris on: 
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